CRED Partners L&T Finance To Offer Unsecured Personal Loans

Fintech unicorn Cred has partnered with non-banking financial company (NBFC) L&T Finance to offer unsecured personal loans to customers. 

In a statement, the NBFC arm of the construction giant said that the loans will be disbursed through the “CRED Cash” offering. The new product will be rolled out in partnership with CRED’s NBFC NewTap Finance and L&T Finance. 

The partnership will leverage synergies between L&T Finance’s experience in the financial services space and the fintech major’s large customer base. Additionally, L&T Finance said that NewTap will bring its expertise in digital lending and risk assessment to the table. 

“This partnership is an opportunity to empower our members—those with high credit scores, impeccable repayment histories, and affluence—with credit from one of the nation’s most reputable lenders. It isn’t just about providing credit; it’s about fostering a cycle of financial virtue, where high-quality institutions meet high-quality customers, driving progress for both the community and the industry,” said CRED founder Kunal Shah.

The partnership also marks L&T Finance’s foray into the co-lending space. 

Commenting on the partnership, L&T Finance’s CEO and managing director Sudipta Roy said, “We are excited to announce our partnership with CRED… We believe that this partnership will further enhance our presence in the digital lending space with focus on customer experience and provide CRED’s customers…”

The development comes at a time when CRED has been on a product launch spree. Last month, the fintech unicorn unveiled a new offering that allows its users to have a unified view of all their bank account balances, reminders for recurring payments and a tool to analyse spends.

Besides, in the past couple of years, it has introduced a clutch of of new value-added services such as CRED UPI (integration with the UPI platform for secure transactions by generating UPI codes), Tap to Pay (NFC-enabled instant payment by tapping one’s smartphone on a merchant’s PoS device) and CRED RentPay, with provision for setting up auto payments. 

Additionally, the startup, in recent months, also launched a vehicle management platform called Garages and travel-focussed product Escapes. 

CRED is looking to make a splash in the unsecured lending space at a time when giants such as Paytm are veering away from the segment. This is largely on the back of the Reserve Bank of India’s (RBI) larger crackdown on unsecured lending. 

Last year, the central bank increased the risk weight for consumer credit exposure of banks and non-banking financial companies, effectively increasing the cost of unsecured loans. In May, brokerage firm Bernstein also said that a sharp rise in unsecured lending by Indian banks and fintechs had led to the RBI tightening lending norms last year.

In June, the RBI also flagged the high levels of delinquency witnessed by fintech lenders for small loans below INR 50,000.