A Bengaluru-based startup may have found the perfect solution to help more Indians adopt credit cards. Slice launched on September 8 a card with a default credit limit of around Rs 2,000 ($27). The startup, which has been issuing cards to young professionals with no traditional jobs, aims to tap the country's potential market of 200 million or 20 crore users.

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Slice has been distributing around 100,000 new 'super cards' -- its marquee offering -- to users each month without charging any joining or annual fee.

The new credit limit, which is considerably lower than the industry’s lowest of about $270, targets those who don’t have a great credit score and intends to slowly help them build it, Slice's Founder and Chief Executive Rajan Bajaj was quoted as saying by TechCrunch.

Bid to expand credit card market

The offering is significant considering how of the hundreds of millions of Indians with bank accounts, only 30 million or three crore own credit cards. The adoption rate of credit cards has remained largely stagnant over the past several years.

“In the last few years, we have actively invested in building a strong risk infrastructure by leveraging data science. Without robust risk management capabilities, it’s impossible to scale such a business and make such a truly inclusive product. But once the capability is built, no one can take the growth away from you. Currently, with a 50 percent M-o-M growth, our NPA is still less than 2 percent, a validation of our superior credit underwriting capabilities,” Bajaj said.

Investors are hooked

The startup decided to limit its credit line to $27 as this amount “allows users to make meaningful transactions,” and if the users properly utilise this limit and pay their dues on time, they can instantly get approved for higher limits, the Slice founder said.

The startup, which raised $20 million in a financing round two months ago, is hoping to issue about one million of these new cards to users by the end of March next year, TechCrunch reported.

The website stated that the startup could probably raise more funds, given that some investors were chasing it to finance a new round of about $100 million at a significantly higher valuation than the previous round.

(Edited by : Shoma Bhattacharjee)

First Published:Sept 8, 2021 6:51 PM IST