Fintech start-up CRED was one of the biggest firms to benefit from the “unicorn spree”, as it joined the unicorn family of India in April following a $215 million fundraise as its valuation soared to $2.2 billion. Today, the young start-up made its first investment-focused product in the form of CRED Mint, a peer-to-peer (P2P) lending product for its members.
CRED Mint allows users to ‘invest’ their savings in a capital pool, which will be used to lend to users who seek personal loans, at a rate of 12-13%. Users can invest any amount between ₹1-10 lakhs and will earn interest of around 9%.
You can withdraw the amount you need for the loan online, and the money with interest will be returned to the investor within a working day.
CRED Mint will be launched in partnership with RBI-registered P2P non-banking financial company (NBFC) Liquiloans, and this feature rolls out to some users from today.
“We’re super excited about this because it’s the first time our community members will be able to invest in one another directly. It’s going to focus on high-quality, low-risk, but much better, inflation-beating returns you can get on your money,” Kunal Shah, CRED founder, and CEO said.
Founded by Kunal Shah and launched in 2018, CRED has been a key player in the e-commerce and payment sectors. It has come a long way from the days when it would reward users with points for paying their bills and aims to become a full-fledged financial services provider with the addition of new segments such as rent payments and personal loans. Currently, it is responsible for hosting about 25-30% of all credit card bill payments in India and has nearly 7.5 million users (who make up 35% of premium credit cardholders in India) and over 2000 brands.
CRED Cash, its short-term lending arm, is growing as well, and the firm is today the country’s leading fintech lender with a loan book of over ₹2,000 crores. CRED has lent about $269 million to customers in loans to date.
“While we were studying user behavior on our platform, we realized that many of our members have lakhs in savings lying idle in their bank account, accruing interest rates which don’t even beat inflation,” said Shah. “This is an erosion of wealth and as a community of high trust individuals we felt that P2P lending offers a low-risk investment opportunity for a Cred member investing in another.”
Backed by Tiger Global, Ribbit Capital, and Sequoia Capital, CRED recorded its members having an average of ₹2,00,000 in their savings accounts. If you want to be a CRED member and be recognized as the most trustworthy audience to provide financial services, you need a credit score of 750 or more.
