CRED, the Bengaluru-based fintech start-up and unicorn has forayed into the peer-to-peer lending market with the launch of its new feature, CRED Mint. This is the company’s very first initiative in this market and also the first community-driven product that enables the members to earn interest on idle money. This is done when members lend said money to other members. To launch this product service, the fintech platform partnered with Liquiloans, an RBI-registered P2P non-banking financial company (NBFC).
Kunal Shah, the founder and CEO of CRED, took to his official Twitter account to talk about the launch. The Tweet read, “Excited to announce CRED mint. Our first community product built on trust. You can now earn up-to 9% interest, while investing in other trustworthy CRED members.”
The company announced that CRED members who take part in the new CRED Mint initiative can earn ‘inflation-beating interest rates’ which amounts to around 9 per cent per annum. This is higher than the typical methods.
Speaking on the matter, CRED said in a statement, “At up to 9 per cent interest, CRED Mint enables India’s most creditworthy individuals to be rewarded for responsible financial behaviour with a smarter way to make idle money work for them.” The company also added that users have the option to apply for early access to CRED Mint.
“The power of CRED is our high-trust community. With CRED Mint, we are enabling members to leverage this trusted community to help one another in their journey of financial progress. We believe in enabling those who demonstrate responsible financial behaviour with the privileges they deserve. The product democratizes access to inflation-beating interest rates, and a frictionless, transparent, and delightful financial experience for CRED’s high-trust members,” said Shah in the statement.
CRED Mint: How Does it Work?
In order to access CRED Mint, be it if you are an existing user of CRED or if you are new to the fold, you need to register for early access to the feature. After registering you will be able to make your investments in CRED Mint. The investments that are made in CRED Mint will be lent out through CRED Cash, which is a lending product created specifically for CRED members. It was created in partnership with licensed banks and NBFCs.
The invested money will then be routed directly to an escrow account that is held by the CRED’s NBFC partner, Liquiloans. The money will then be diversified across 200 plus borrowers on average. Members of CRED Mint can invest anywhere between Rs 100,000 to Rs 1,000,000 which is commission-free. Those who invest can earn an interest of up to 9 per cent.
What Make CRED Mint Standout?
CRED Mint advertises itself as being completely transparent while allowing the user to track their investments’ progress in real-time. It also suggests that the members can quickly and easily withdraw their cash at any time they want. This can be done either partially or fully with no penalty, while still retaining the interest that you accumulated for the period that it was invested. The entire withdrawal process will be entirely online and the money will be returned to the investors within the working day, according to the company.
Peer-to-peer lending is not a new concept by any means, but it would seem that CRED’s approach to it might be uniquely poised. One of the issues with this kind of category is the defaulters. CRED might be able to tackle this issue as it mostly CRED members have to have a minimal credit score of 750 or higher to join the app. This makes the target audience financially trustworthy, which might bring down the rate of defaulters in this initiative.
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