Hyderabad-based Recordent evolves credit profiling platform

Hyderabad: SMEs face myriad problems and one among them is the problem of delayed payments by customers. A majority of sellers do not know the buyers’ financial health and keep extending financial credit to them and suffer in the process. Hyderabad-based fintech company Recordent has evolved a software-as-a-service that will do the credit risk profiling, […]

Hyderabad: SMEs face myriad problems and one among them is the problem of delayed payments by customers. A majority of sellers do not know the buyers’ financial health and keep extending financial credit to them and suffer in the process.

Hyderabad-based fintech company Recordent has evolved a software-as-a-service that will do the credit risk profiling, just like what the credit bureaus do for banks and other lenders. With this, sellers can check the financial strength of buyers before delivering their goods or services. They can opt to work with those with a favourable credit score. Or, they can also revise the terms and conditions for the transaction to happen, said Winny Patro, Recordent Chief Executive Officer and Co-Founder.

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The platform, which allows businesses to post the invoices and dues, will also inculcate a culture of early payment as this will impact their credit scores for the future transactions. “The problem of delayed payments has so far not been addressed the way it should be. We have modelled our product on the lines of what a credit bureau does to lenders. It will give insights into the payment behaviour of the buyers and allow businesses to extend credit accordingly,” he said.

Recordent’s platform is now used by more than 12,000 businesses across the country but a majority of the clients are from Telangana and Maharashtra. The company is reaching out to new businesses and will be catering to about 50,000 businesses across the country in a year, he said.

“We helped several businesses receive payments that were due for more than two years within weeks. With cash-flows eased, they are able to focus on their core areas,” Patro said, adding that it is now tapping more than SME industry associations to aid them in their credit management practices.

It recently evolved a solution for the food and beverages sector, which suffered an exaggerated delay in payments and cash flow during the pandemic. This delay created a need to build a data network with credit profiling to create transparency. Under this partnership, the industry association asks all members to use the Recordent platform for assessing credit score of buyers before transacting.

“Through these kinds of partnerships, businesses will have a capability to reduce their overall risk as they will transact with only those who have a good credit score. This will encourage credit-impaired buyers to maintain a good payment history to avail credit in future. This initiative will strengthen internal controls of the industry,” he said.

Mismatch of invoices and goods are also a reason for the delay in payments and that is also addressed as the invoices are captured on the dashboard. This also comes handy in case a dispute arises as the transactions are documented. The businesses can also opt to serve a legal notice for defaults without having to hire lawyers- the feature is embedded with the platform via its empanelled lawyers.

Businesses pay a fee ranging from from Rs 1,500 to Rs 15,000 depending on scale of operations for using the platform. The company now has 45 people and the number will rise to 100 in a year, he said.

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