Das has been hired for Cred’s in-house non-banking finance company Newtap Finance, two people in the know told ET.
Typically, Cred does not have designations like CEO or business head, but Das would be the senior-most executive for the risk side of the business, one person said.
Das, who spent more than 12 years at HSBC Bank and then was with Bajaj Finance, heading its analytics team, had joined Bengaluru-based lending startup Freo (previously MoneyTap) in 2020.
One of the sources quoted above said Das has already left Freo and could join Cred officially very soon.
Emailed queries to Cred went unanswered.
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The company recently announced its FY23 financials, which showed that its employee benefit expenses jumped more than two and a half times in FY23 to Rs 788.9 crore from Rs 307.6 crore in FY22. One of the people mentioned above said that this cost will go up further for Cred as it intends to make senior level hires for its multiple business entities over the current fiscal too.Also read | Cred’s FY23 revenue more than triples, losses grow marginally
ETtech“Das is an expert hand at credit underwriting and risk assessment. With this high-level hiring, Cred is showing its intent to seriously scale up its credit functions,” said one of the persons quoted earlier.
Underwriting customers seriously
Cred is looking to scale up unsecured credit products like personal loans, consumer durable loans as the first set of products, one of the persons quoted earlier said. Eventually, fintechs will venture into secured lending, but given the current customer base for Cred, instant personal loans at competitive rates will be the starting point, he added.
“Fintechs have suffered major credit losses over the last three four years, mainly due to lack of proper credit underwriting policies, but now the major fintechs want to invest heavily in building proper fraud prevention models,” said another person ET spoke with.
ET wrote on May 30 on how Cred could eventually use Newtap Finance as a means to cater to the credit demands of consumers who are not part of the Cred ecosystem. The startup will use CreditVidya, an entity it acquired in November 2022, to build a credit business on top of Newtap Finance.
“Once the floodgates open, Cred will need proper checks and balance to ensure the best quality of customers get approved,” said one of the persons quoted above.
Focus on lending
While Cred started with credit card bill payments, the Peak XV – unicorn is mainly looking at financial services to generate a healthy topline.
A senior fintech industry executive who has looked at Cred’s business closely pointed out that Cred could look at the meeting point between Unified Payments Interface-based payments and quick disbursal of credit.
“Credit on UPI will get a large number of new-to-credit customers into the ecosystem and players with a large balance sheet and great user interface will be able to tap into that,” the executive said.
The credit card market is expanding rapidly and so is the UPI market. As more and more consumers get access to credit cards, a platform like Cred will become more useful. And the Kunal Shah-founded startup intends to tap into that opportunity.
No wonder Shah is wooing very senior industry executives to join the lending arm of his business, which will eventually be the main driver of revenue for the company going forward.