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Cred Mint Is Here to Reward the Creditworthy Individuals
On August 19th, 2021, CRED announced the launch of a P2P lending platform called Mint with the aim to monetize its 7.5 million users. The Mint platform is being launched in partnership with Liquiloans; an RBI registered peer-to-peer non-banking financial company.
Kunal Shah, CEO of CRED, announced the launch of CRED Mint via Twitter. Also, it offers an interest rate of 9% to reward creditworthy individuals for their financially responsible behaviour.
What does a P2P lending platform do?
P2P lending is a way to use one's idle money to provide loans to potential borrowers to earn interest. So, in simple words, P2P lending can help people make money over their idle money by lending the money through a service provider.
Most of the Peer-to-peer lending platforms are organized by Non-Banking Financial companies, unlike traditional banking. P2P is a relatively new credit model to meet the requirements of business credit.
How will the CRED Mint platform work?
The fintech app users can act as lenders and borrowers where they will be offered an interest rate of up to 9% upon investing their money in a P2P lending platform. They can invest between 1 lakh to 10 lakh rupees.
Notably, in P2P (or peer-to-peer) lending, the money is borrowed directly from an individual and not from a financial institution.
With CRED Mint, the users can get commission-free loans and investment options where they can invest their money with just a click.
CRED Cash will be used to lend out the investments made in CRED Mint, and the invested money will directly be routed to an escrow account held by liquiloans, NBFC partners and diversified borrowers to reduce the risks.
How is CRED Mint different from other P2P lending platforms?
The platform is said to be completely transparent, which will allow the users to track the progress of investments. Additionally, users can quickly withdraw the cash at any moment without any penalty, along with retaining the accumulated interest.
According to the company, the withdrawal process will be absolutely online, and the money will be returned within a day. The other thing which makes CRED Mint stand out is the financial trustworthiness of the target investors. It means that people with credit scores of more than 750 will be able to join the app.
The traditional peer-to-peer platforms are pretty successful, but they usually attract borrowers with low incomes and poor credit histories. Although the P2P concept is not new, CRED's approach is rather unique. CRED members must have a minimal credit score of 750 to join the app, which can potentially tackle the issue of defaulters. Hence, the audience will be financially trustworthy.