FinTech: Indian Fintech CRED Launches Mint, A Community Lending (P2P) Feature
CRED members can lend at upto 9% annually.
Three year old, India-based fintech startup CRED has launched ‘CRED Mint,’ a community lending feature, allowing its high-credit-rated members to lend to one another at rates earning as high as 9% per annum. A prospective member must have a minimum credit score of 750 to join the platform. (The Economic Times)
Launched by Kunal Shah, CRED rewards its 7.5 million users for paying credit card bills on time. The P2P lending facility is said to be the the fintech’s first investment-oriented product.
CRED has tied up with non-bank lender LiquiLoans for the Mint product. Members interested in lending their idle funds, even for short periods, pay into a capital pool. Borrowers draw from this pool paying interest at 12-13%, while lenders earn 9%.
Lenders can invest loan funds in the range from Rs 1 lakh (US$1,345) to Rs 10 lakh (US$13,450).
Shah was inspired to launch the product after observing how so many Indians let money idle away in a savings account earning pitiful returns.
“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,” Shah told ET in a video interview. “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.”
“It’s the first time our community members will be able to invest in one another directly,” Shah told TechCrunch. “It’s going to focus on high-quality, low-risk, but much better, inflation-beating returns you can get on your money.”
The fintech last raised $215 million in April and entered the unicorn club after its valuation vaulted to $2.2 billion in a round co-led by new investor Falcon Edge Capital and existing investor Coatue Management.
Image Credit: Flickr
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