CredoLab – a Singapore-based startup which has developed a credit risk management solution for emerging market economies – has just closed its pre-series A round. This latest injection of cash means that it has raised just over US$1 million in funding since it launched last year.
The funding round was led by Fintonia Group, a Singaporean fintech-focused VC firm which holds investments across Southeast Asia and Hong Kong. A consortium of institutional investors from around the region also participated, including Indonesia’s Reliance Modal Ventura.
CredoLab’s app, CredoApp, extracts data from a user’s mobile device to create a unique and anonymous digital footprint, which the company is then able to develop into predictive credit scorecards.
It also helps lenders reduce risk and improve their approval rates.
This technology may be particularly beneficial in “underbanked” communities – such as the emerging markets of Southeast Asia – where a comparatively lower proportion of the population have bank accounts or credit cards. These consumers therefore have little in terms of a personal banking history from which lenders – including commercial banks, microfinance institutions, and peer-to-peer schemes – can determine creditworthiness should they request a loan.
CredoLab says its current client base consists of more than 10 financial institutions throughout the Asia-Pacific region, and it expects to double this within the next six months. Moreover, the company predicts it will reach profitability by the end of this year, after generating more than a million credit scores for its users.
CredoLab’s founders believe that their company’s technology can help to improve access to credit while also assisting lenders to reduce risk and improve their approval rates.
The unavailability of credit risk information is a significant problem in emerging markets, as it can substantially restrict the flow of capital to would-be entrepreneurs and small businesses. It is an issue that several startups in the region have sought to address. India’s highest-profile player in this space is New Delhi-based IndiaLends. Vietnam’s Tima has raised funds for its solution, which uses analysis of a person’s social media accounts to help come up with a credit score for them.
Fintonia’s chairman and CEO Adrian Chng, who is also a co-founder of CredoLab, will join the startup’s board of directors.
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