Credit cards have risen to prominence in India, a country that has been dependent on cash for most of its history, as the need for credit has grown at an exponential rate across the country. However, although credit cards are common in developed countries, India continues to lag behind as the credit scoring system has failed to trickle down to the majority of the population.
This is something Bengaluru-based fintech start-up Slice aims to work on, and its latest move to expand its credit card offerings and launch a card with ₹2,000 ($27) as the default credit limit is a step in the right direction. .
Slice is known for offering its customers flexibility in paying credit card bills and reward points on transactions. It is also known for issuing Visa cards and is currently actively working towards the widespread adoption of credit cards in the Indian market.
With this new card, it will offer the same advantages as its super card, without membership fees or annual fees. Thus, it seeks to provide a fresh start for early adopters of Indian credit and help them build a good score over time.
According to Slice Founder and CEO, Rajan Bajaj, the new credit limit is for people who don’t have a good credit score or score for that matter, and the new card helps them build it. The higher your credit score, the better, as it is used by lenders to determine the likelihood that you will repay your debts. With good credit scores, you have a better chance of getting your loan approved and you can also get additional benefits, such as lower interest rates, better repayment terms and an approval process. quick loan.
“The reason for lowering the starting credit limit was to open the card up to more eligible customers,” Bajaj said, adding, “We had a large number of customers on our waiting list. “A credit limit of Rs 2,000 is something anyone can be creditworthy with in India. All customers will enjoy the same benefits as in our existing card regardless of the credit limit.”
The startup decided that $27 was an appropriate number because it allowed users to make meaningful transactions through card readers. As people used the limit correctly and paid in a timely manner, thereby creating a credit history, they could get instant approval for higher limits.
The only reason Slice was able to take this initiative was because it had actively invested in building a strong risk infrastructure leveraging data science over the past few years. Startup plans to roll out no less than 1 million cards to customers (from a mix of Tier I, II, and III cities) by the end of FY22, which will be a leap remarkable compared to Slice’s current status – it currently has a presence in 300 cities.