Give Some Credit To the Masses

Catering to the credit starved should be the way forward

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Data suggests India has nearly 64 million credit cards in use as of 2021. This has increased from the nearly 58 million credit cards in August 2020. India's credit card network works in an endless loop. To be a part of this network, one requires a solid credit footprint, and in order to build that footprint, one requires a network that allows them to get a credit card. The thing about credit cards is that they also become a status symbol of sorts: they give the impression to the owner that because they now earn a certain amount, their banks deem them credit worthy and society perceives them as having gone up a rung in the ladder called success.

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Traditional banking formats tend to alienate a large section of credit-starved people. The fintech ecosystem offers a more democratic setup by giving a platform for instant funds to the unserved and underserved sections of the society. "Nobody should be credit starved' is a fairly achievable target if companies begin to focus on serving the masses. Several companies operating in this space aim to empower customers by improving their financial health, leading to customers' inclusivity, growth and eventual economic independence.

Industry body ASSOCHAM suggests that India's digital payments market is expected to more than double: from $64.8 billion this year to $135.2 billion by 2023. In order to support such growth, the digital payments market would need to open up further. Just as credit cards are getting popular, fintech companies can fill the supply gap by meeting the increasing demand. To understand how best to support the masses and to ensure they get the credit they deserve, it's essential to understand what a customer really needs.

Some customers have deep-rooted needs, such as supporting their families, buying groceries, repairing their homes, the like. People with limited earnings, people looking to grow their earnings, the salaried and the self-employed; each category would like access to credit, or at least have the freedom to aspire for credit. On the other end of the credit spectrum are those who have lifestyle and occasion-based requirements. These could be to upgrade to a car from a bike; an international trip; earning reward points on their cards, essentially to be deemed credit-worthy by their banks. Everybody deserves a shot at getting credit, and the opportunity to fulfill their dreams.

Fintech companies can help, and are helping people realise these dreams. They give space to people new to the universe of credit to build their credit, which then allows people to take on larger financial steps. These are lifetime free cards that have zero membership or joining fee, annual fee or hidden fee; free ATM withdrawals, instant funds ranging from as low as INR 1,000 to up to INR 5,00,000, which allows credit to be available to a larger customer base. Fintech companies offer cashback offers, allow these offers to repay a customer's EMI, and even act as a virtual and physical card for varied purposes: shopping, traveling and eating.

By continuing to serve the underserved, fintech companies are making credit available to the masses.