This Motilal Oswal-backed startup plans to issue one million credit cards over the next 150 days, leveraging its $ 2 billion loan portfolio.

  • It only took 60 days for digital lending startup KreditBee to issue 100,000 credit-based payment cards.
  • The company says its $ 2 billion loan portfolio with 5.5 million users has set the pace for that growth.
  • KreditBee claims that the trigger for this card was the spending habits of its users.

Credit-based payment cards are on the rise as people’s spending habits have shifted to digital. As more and more users feel comfortable spending online, the lack of payment solutions is not helping.

This has prompted many Indian brands to roll out a credit-based digital payment offering that allows customers to deal directly with merchants. Over the past three months, PayU co-founder Nitin Gupta’s Uni startup and Motilal Oswal-backed digital lending platform KreditBee have tried to do just that.

It only took 60 days for digital lending startup KreditBee to issue 100,000 credit-based payment cards. Impressed by the short timeframe of this stage, the fintech startup now aims to issue a million cards of this type by the end of March 2022. It claims to be well on track to achieve this goal.

The company says it is currently adding around 5,000 users per day and this is the basis for the latter goal.

Madhusudan Ekambaram, co-founder and managing director of KreditBee, told Business Insider US that the company will issue another 120,000 credit payment cards in October.

This will bring the total to 220,000 since the card was launched in August 2021.

The card offers a limit of 10,000 and increases to 1,000,000 based on Know Your Customer (KYC). The customer must repay the amount within 45 days.

KreditBee – founded by Ekambaram and Karthikeyan K in May 2018 – is an instant personal loan platform for self-employed and salaried professionals. The company is backed by Mirae Asset-Naver Asia Growth Fund, PremjiInvest and others.

Target audience for KreditBee

Criteria What do they do?
Edit
Set 1 Self-employed and salaried workers in level II and III towns. Employees of micro, small and medium enterprises (MSMEs).
Set 2 People in metropolitan cities who do not have a banking history and are looking for convenience.
Set 3 New Age Workers – delivery workers to e-commerce businesses or food-grouping businesses whose salary consists mainly of incentives.

The company offers flexible loans as well as personal loans ranging from 1,000 to 2,000,000 to individuals and hosts several licensed non-bank financial companies (NBFCs) to facilitate them.

Ekambaram claims that KreditBee has built a loan portfolio of ₹ 15,000 crore ($ 2 billion) in the span of three years and has over 5.5 million credit users on its platform. The launch of these payment credit cards was based on the consumption habits of these individuals.

Therefore, the target audience for its lending business will also be a target audience for these cards.

KreditBee had discovered that most of its users were getting loans to buy durable consumer goods like cell phone, laptop, headphones, etc. This prompted the fintech startup to test a digital card that will allow its customers to purchase products directly online.

In addition, the card also allows KreditBee to interact directly with merchants and further expand its database.

The company’s profitability was hit in fiscal 2021 due to the COVID-19 pandemic, but it is once again on track to record another profitable year, Ekambaram said.

Who else should KreditBee watch out for?

Uni, a competitor of KreditBee, has issued over 50,000 customers to date and adds over 1,000 new additions daily. The company – launched last year and launched in June 2021 – issues a special 1/3 Visa card, in partnership with RBL Bank and Mauritius-based SBM Bank, to its customers.

This offer works much like a credit card, but divides all customer transactions into three installments that must be repaid over a three-month period without any interest. The recently launched company aims to issue one million cards by the end of March 2022.

The Fintech One Card start-up also recently teamed up with the Federal Bank to launch its mobile phone-based credit card. Meanwhile, Mastercard is experiment with the buy now option, pay later to allow buyers to make payments in four installments.


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