CRED is an Indian fintech(financial technology) company, based out of Bangalore and was founded in 2018 by Kunal Shah. The app’s main feature is allowing users to make credit card payments, save them from hidden charges and interest on amounts due through its app for which they get rewarded. Approximately 20-25% of all credit card payments happen through CRED. Now if you come to look at it, CRED has the database of the elite 2% of the country who own a credit card and the database of those who have a good credit score. If you come to think of it, having such a trustworthy database(all CRED members need to have a credit score of 750 or above) and launching a Peer to Peer (P2P) lending system only makes sense and is an extremely well thought idea.
CRED MINT – CRED members can now lend anywhere near 1,00,000 to 10,00,000 to their peers and earn an interest of 9%. While users can borrow them at an interest of 12-13%. Now P2P lending is not a new concept, but the major issue with P2P lending is that approx. 20% of the people don’t pay back the loans. This problem is not going to affect CRED because it is very uniquely positioned because all it’s members are highly trustworthy and have a credit score of 750 plus. While CRED’s team was internally looking at the data it showed that many Indians have lakhs in their savings account and the interest on them doesn’t even beat the real inflation. According to Kunal Shah, founder of CRED, it is a complete erosion of money.
For CRED MINT, they have partnered with LiquiLoans, an RBI-registered Peer to Peer NBFC. Shah said CRED will eventually partner with more players as they scale. Users can invest and withdraw any time they feel like without having to pay any interest or penalty. Shah said that the withdrawal process is fully online, and the money plus the interest will be returned to the investor within a working day. As a digital platform, CRED reduces friction, inefficiency, commissions and overheads to pass on higher earnings for members.
In an INK talk Kunal Shah proposed a very interesting theory which more or less explains the root cause for the success of major start up in the world According to him in this world there are a ton of systems and a ton of inefficiencies and hurdles which often prevent ordinary people like you and me from moving into a more efficient system. But we as human beings once we find this efficient system we have this innate ability to move on from where we never ever come back. As as a result of which if an entrepreneur is able to build a startup in such a way that he is able to fix these inefficiencies. This will help ordinary people to overcome the hurdles and they will be able to build a startup which will be a revolution.