Paisabazaar.com, India’s top lending marketplace and credit score platform, and SBM Bank India today announced the launch of Step Up Credit Card – a credit builder solution created for customers with restricted access to formal credit, due to ineligible credit score.
A important portion of Paisabazaar’s lengthy-term development technique is creating neo-lending goods with partners, to meet distinct customer require gaps. These goods would drive inclusiveness, by enabling underserved segments to access credit and more than the lengthy term, strengthen the lending ecosystem.
The Step Up Credit Card, constructed in partnership with SBM Bank India, is the 1st solution to be launched beneath Paisabazaar’s neo-lending technique.
A secured card supplied against a fixed deposit (with SBM Bank India), Step Up Card assists customers with broken credit or these with no credit history to steadily create their Credit Score. While accountable use of Step Up Credit Card enables customers to attain a robust Credit Score, it also enables them to love positive aspects of a credit card, and earn robust returns on their fixed deposit.
Commenting on the similar, Neeraj Sinha, Head, Retail & Consumer Banking, SBM Bank India, stated, “At SBM Bank India, we believe smart banking – being a combination of technology and banking as a service — solves problems and empowers people. In India, the penetration of credit cards is low owing to lack of credit history and high delinquencies. We partnered with Paisabazaar to design a product that solved both these challenges – backed by a fixed deposit, it not only protects the quality of the assets but also helps build the credit score. We conducted a pilot program which witnessed great results and today we are launching the card for everyone.”
Consumers can take the Step Up Credit Card on the Paisabazaar platform via a totally digital and paperless course of action, with immediate issuance and activation. Paisabazaar and SBM Bank India are also producing a plan that would allow revisions in credit limit, based on customer usage and behaviour via the Step Up Credit Card.
Low penetration of formal credit in India is reflected in the country’s household debt to GDP ratio, which is considerably reduce than that of created markets like the UK and the US. This is mostly for the reason that huge segments of India’s population have remained outdoors the realm of formal credit. While segments like Salaried Prime have been traditionally served effectively by huge banks and NBFCs, other huge segments like Salaried Sub-Prime, New to Credit and SMEs have had restricted access to formal credit.
The penetration of credit cards, for instance, is dwindling at ~5%, with only ~60 million active credit cards in the nation, as per RBI information. According to an evaluation by Paisabazaar, only ~25%-30% of these who apply for a credit card in India are in a position to get one. Around 30% of rejections for credit cards by banks are due to ineligible credit score.
Naveen Kukreja, CEO & Co-founder, Paisabazaar.com, stated, “For India’s lending industry, the big challenge remains market under-penetration. Even today, credit is restricted to only select consumer segments. At Paisabazaar, we are uniquely placed to expand the reach of formal credit, together with our partners. The Step Up Card, created with SBM Bank India, is a testimony to our commitment to serve underserved customer segments.”
Paisabazaar’s neo-lending goods, like the Step Up Credit Card, are particularly targeted at these huge segments, with the aim to make them more credit healthier and strengthen their eligibility for future requires. With one hundred% approval prices, segments who traditionally struggle to get a credit card due to employment sort or geography, would also be in a position to use the Step Up Credit Card and get positive aspects of a credit card.
Under its neo-lending technique, Paisabazaar plans to co-build and introduce revolutionary goods that would meet distinct require gaps of varied customer segments.
Gaurav Aggarwal, Senior Director, Paisabazaar.com, stated, “Along with catering to the needs of underserved segments, ownership of processes and products would help us offer a great consumer experience. Also, data related to usage and behaviour would provide key insights and intelligence, enabling us to identify consumer needs more accurately, fostering further innovations.”