cred: ETtech Deep Dive: How Kunal Shah’s Cred is rejigging its lending strategy to widen user base

Kunal Shah’s Cred is expanding its lending strategy as it looks to tap a wider user base beyond the top layer of customers and offer a wider use case for credit. In a major change to the company’s lending strategy, Cred plans to tap into the large market of consumers who are new to credit, that is they have never taken any formal credit in the past, two sources in the know told ET. Also, Cred wants to go beyond pure play personal loans for its own users and tap into new opportunities around consumer durable loans or check out finance.

But to cater to these customers, Cred will not use its current app. It will instead leverage Prefr, a digital lending platform, which merged with Cred through the acquisition of CreditVidya and Newtap Technologies, the in-house non-banking finance company owned by Shah, to power these loans. Cred acquired CreditVidya in November 2022 while Prefr is the consumer lending arm of CreditVidya and currently offers personal loans working with banks and NBFCs.

“In lending, there’s only so much you can do with the top of the credit layer customers in the country (top 30 million). The base is slow to grow, and they aren’t as credit hungry so the strategy for Cred is to bring new-to-credit customers and offer them the present suite of products on the main app,” said the above source.

Another person in the know said that Newtap, which acquired NBFC Parfait Finance and Investment, hasn’t begun offering credit through Prefr yet, the integrations are taking place and the incoming pipeline should get opened up soon, they added. This pipeline could become extremely critical for Cred to aggressively scale up its lending business.

Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.

Kunal Shah’s Cred is expanding its lending strategy as it looks to tap a wider user base beyond the top layer of customers and offer a wider use case for credit. In a major change to the company’s lending strategy, Cred plans to tap into the large market of consumers who are new to credit, that is they have never taken any formal credit in the past, two sources in the know told ET. Also, Cred wants to go beyond pure play personal loans for its own users and tap into new opportunities around consumer durable loans or check out finance.

But to cater to these customers, Cred will not use its current app. It will instead leverage Prefr, a digital lending platform, which merged with Cred through the acquisition of CreditVidya and Newtap Technologies, the in-house non-banking finance company owned by Shah, to power these loans. Cred acquired CreditVidya in November 2022 while Prefr is the consumer lending arm of CreditVidya and currently offers personal loans working with banks and NBFCs.

“In lending, there’s only so much you can do with the top of the credit layer customers in the country (top 30 million). The base is slow to grow, and they aren’t as credit hungry so the strategy for Cred is to bring new-to-credit customers and offer them the present suite of products on the main app,” said the above source.

Another person in the know said that Newtap, which acquired NBFC Parfait Finance and Investment, hasn’t begun offering credit through Prefr yet, the integrations are taking place and the incoming pipeline should get opened up soon, they added. This pipeline could become extremely critical for Cred to aggressively scale up its lending business.

Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.