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German online lender Kreditech looking to ramp-up in India

Publish date: 08 October 2019
Author: Kreditech

A German based online lender Kreditech announced its global strategy, with India as key market where it plans to expand rapidly. The company ambition is to achieve a total global EUR 1 bn revenue by 2025. With Indian consumer lending segment poised to reach nearly EUR 1 trillion over the next five years, the country will play a vital role in the international expansion of Kreditech. The company plans to grab its share in the dynamic Indian market building on the experience from rapidly developing European markets, such as Poland, Russia and Spain, combined with solid local know-how.

Established in 2012 in Germany, Kreditech combines market-leading tech capabilities and data science, with sound insight into consumer borrowing needs (as direct lender) and extensive experience in POS and e-commerce partnerships.  With well-established and growing operations in Poland, Russia and Spain, Kreditech's near-term focus will be on rapidly scaling its business in India - declares company CEO, David Chan.

Kreditech India Financial Services was incorporated in 2017. Kreditech India received license from RBI to operate as NBFC in October 2018 and commenced business in February 2019. Based in Mumbai  KT India has been implementing the new global strategy of the company, targeting near prime consumer market with focus on POS Loans and Personal Loans Direct to customers . After 9 months of the proof-of-concept stage this model has proven to be successful, giving Kreditech India heads up for further expansion. The mother company plans to utilize most of its EUR 20 million funds acquired during a recent equity capital round to grow Indian business.  By 2020 Kreditech aims to reach a total EUR 7,5 million in credit issuance on this market, tripling its current portfolio and break even, with over 80 employees onboard.

So far Kreditech India has serviced over 1200 customers, mainly through partnerships with aggregators & reputed channel partners. The company now plans to expand its direct lending through the Kreditech India brand. Partnerships with e-commerce, aggregators of multiple merchants, direct deals with manufacturers in cross sell, as well as providing easy access to funds to a final customer are also important pillars of Kreditech strategy in this market.

The total consumer credit issuance in India is estimated to reach EUR 121 bn by 2021 according to Euromonitor. The consumer lending segment is poised to reach nearly EUR 1 trillion. As David Chan underlines, disruption in this segment is created by technology advancement, real-time scoring models that use big data and machine learning algorithms to make better credit decisions. "We are very excited about the Indian market. It is a dynamic and fast developing economy. We have been successful in finding our niche and have established the right proof of concept. Now it's time to scale up while a key target customer segment remains unaddressed by the competition" - says David Chan, Kreditech CEO.

Ashish Kohli, Kreditech India Managing Director & CEO stresses, that Kreditech business model perfectly fits Indian market specifics. "The cornerstone of Kreditech's operations is a unique, differentiated, end-to-end fully automated underwriting process that combines alternative data sources with machine learning. This process enables a seamless customer experience based on a dynamic application process, near-instant credit risk assessment and smart, personalized offerings. We strongly believe these capabilities position us perfectly to be the platform of choice for tech based lending to individuals in India. Our ambition is to bridge the credit gap for the banked and underbanked population, as we focus on servicing the near prime customer segment" – says Ashish Kohli.

Strong Kreditech tech and risk management competences were recognized by Indian authorities. In 2018 the company received first of its kind digital license from Reserve Bank of India to operate as Non-Banking Financial Company (NBFC).

Kreditech's vision is to be the global leader in technology-enabled consumer lending. Combining non-traditional data sources and machine learning, the company provides access to better credit and more convenience for digital lending. The product offerings include a variety of consumer loans, as well as "Lending as a Service", allowing partners to integrate Kreditech's credit products via an API into their own platform and services. Founded in 2012 and headquartered in Hamburg, Germany, Kreditech operates in India, Poland, Russia and Spain, with supporting teams in Romania and Thailand.