• Chethan Machaknur

Credit Wise Capital raises $6 million from prominent family offices and angels


Mumbai- Credit Wise Capital (CWC), a tech-enabled consumer finance NBFC has raised US$6 Million in the seed funding round. The round saw participation from marquee angel investors like Ajay Goel, Stanford Business School alum and serial investor, Anuj Golecha, founder of Venture Catalysts, Gaurav Gandhi, director at EssGee group, Anup Agarwal, director of Shanti Group and Gaurav Singhvi among others. The company intends to use these funds to grow its dealer network, increase geographical expansion, improve collection technology and underwriting models.


Credit Wise Capital, founded by Hirak Joshi and Aalesh Avlani with an aim to disrupt the two-wheeler lending ecosystem by deploying the perfect blend of traditional lending with new-age fintech data science. CWC is currently present in Mumbai and Pune and has an active dealer network of over 100 and disbursed 12,000 two-wheelers in a span of 16 months with an average ticket size of 65,000. The company has been able to onboard reputed debt partners like AU Small Finance Bank, Hinduja Leyland Finance and Vivriti Capital. The primary use of these funds is to grow this dealer network, increase geographical expansion, improving collection technology and improving underwriting models.


The lead investor, Mayank Shah has been in conversation with CWC and has expressed its delight on partnering with a tech-enabled NBFC.


“We were impressed with the systems and processes that they have built. The razor sharp focus on cost reduction to achieve scalability in this business was one of the primary reasons for our investment in Credit Wise Capital” – Mayank Shah, Chairman of M J Shah Group.


Credit Wise Capital’s focus is on collection by deploying the right mix of human capital and tech processes while keeping a major check on the costs. The current technology helps bridge the gap of rising underwriting and collection costs. CWC is different from its competitors as it focuses on deploying technology for collections and on pre-delinquency management by initiating collection effort even before the first presentation. This along with dedicated focus on amicable solution management with customers has been instrumental in keeping NPA at a minimal at CWC.


“Many lenders progressed fast thinking that tech would handle risk on its own. They forgot that technology is as good as the hands that are put into use. Tech is an enabler and not a panacea for all the ailments. Technology cannot convert a delinquent customer into a good one,” said Hirak Joshi, Co-Founder of Credit Wise Capital.


Hirak Joshi was previously national product head of two-wheeler loans in ICICI bank, his previous organization where he was a part of for over 17 years. Throughout his career, he has been instrumental in overseeing multiple other products such as SME lending, retail liability and branch banking.


The Indian two-wheeler industry is expected to grow at 8% CAGR over the next 5 years and the finance penetration is at a mere 48%. With rising two-wheeler costs, and reducing purchasing power capabilities due to COVID, the need for finance is set to increase. The average Indian’s dependency on a two-wheeler is expected to accelerate even further with the reluctance to travel in public transportation due to the current pandemic.


Credit Wise Capital follows two approaches for its loan origination strategy. One is the traditional dealer driven approach and the other is more inbound where a customer logs in, selects their desired two-wheeler and the fulfilment is done by CWC. The customer is divided into three categories – fast track, income proof and no income proof. Using a proprietary tool and a business rule engine taking 35+ parameters into consideration, a decision is given whether the customer qualifies for a loan or not. The customer is informed and post-submission of a couple of more documents, money is disbursed into the dealer account. The dealer along with the CWC liaison hand holds the customer during the post disbursement process.


The collection process begins from the moment the customer takes the loan, where constant tracking of customers app usage, SMS follow up, reminders for the due date and more begin to remind the customer of their duty. At CWC the endeavour is to bring complete transparency and enhanced choices for the customer. Dynamic and risk-adjusted pricing, easy to understand offerings and constant customer engagement are the key aspects of this strategy followed at CWC.

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