This insights company looks to unlock new growth opportunities for MSMEs with the power of AI/ML

India’s Micro, Small and Medium Enterprises (MSMEs) employ close to half of India’s population, generate about half of the country’s exports, and contribute to around a third of its GDP.

However, there are many barriers to the overall growth of the MSME sector. To facilitate the growth of any MSME, access to working capital is crucial but estimates show that only 15 percent of Indian MSMEs have access to formal credit. Those that do have access to credit are pressured to utilise their personal and business assets as a collateral to avail it. The lack of these resources also makes them vulnerable to unorganized forms of lending, which puts their business at risk.

Another major hurdle is the unstable payment recollection cycle. Historically, MSMEs largely do not rely on data to back their business partnership decisions and this has led to problems in payment recollection cycles. Stories of MSMEs that have closed shop due to unpaid debts left by their customers — both large and small — are unfortunately quite common. This is mainly because smaller organisations make business decisions based on relationships and historical transactions between them.

In 2016, Meghna Suryakumar and Sandeep Anandampillai recognised that a lot of these problems can be addressed if business decisions of MSMEs and formal lenders are backed by data and the power of artificial intelligence. And this led to the birth of Crediwatch — an AI company that provides financial insights, tools, systems to empower businesses.

Improving credit access with the power of data-driven insights

Crediwatch aims at solving three major problems faced by businesses, which are:

1. Financial inclusion of small and medium enterprises (SMEs)
2. Removing barriers to trade and credit
3. Building trust and transparency in business

When it comes to availing credit from formal sources, MSMEs often fall short of the documentation necessary, and their credit history is, in many cases, non-existent. This prevents them from obtaining a line of working capital and thus, their growth stands still.

Crediwatch uses the power of data with multiple layers of artificial intelligence and machine learning (AI/ML) to create in-depth reports about the financial stability of organisations. The automated platform accesses over 2,500 public data sets as well as ingests private data to create credit reports that MSMEs can use to avail credit and better credit terms from their lenders.

Given that most banks are switching from providing asset-based credit to that of cash-flows, these credit reports from Crediwatch enable MSMEs to build a stronger case with banks and NBFCs.

Crediwatch’s automated platform accesses financial as well as non-financial parameters and data points such as court cases, blacklists, GST filing analysis, etc to generate risk scores, monitor redflags and leverage AI to predict potential distress with a 12-month lead time.

Crediwatch’s bot infrastructure enables an exhaustive coverage of over 10 million business entities in India with any form of digital footprint. Its early warning system monitors one’s portfolio and provides alerts that can help detect distress in a business with upto a 9-12-month lead time.

Democratising data insights to empower business growth

Crediwatch can also be used by organisations to take business decisions backed by a thorough research of their customers, vendors and suppliers. They can leverage the power of these insights to reduce their risk of bad debts and stabilise payment collection cycles.

This also helps organisations grow beyond their existing geographies and trust big and small customers alike before business transactions. Organisations can thus stay ahead of hazardous situations with their business partners using risk intelligence and actionable insights. And this is a major growth-enabler for MSMEs.

With an aim to help MSMEs avail a line of working capital through the power of data and artificial intelligence, Crediwatch aims to become a major catalyst of growth for MSMEs through its data aggregation and AI/ML-powered platform.

To know more about Creditwatch, its offerings and the impact created so far, click here.