1 min read.Updated: 25 Aug 2021, 10:10 AM ISTLivemint
Freo has disbursed loans of more than ₹4,400 crore to its users so far under its MoneyTap service. MoneyTap offers a credit line of up to ₹5 lakh. Its services also include Freo Pay, which offers a buy now pay later feature
NEW DELHI :
India’s first credit-led neobank, Freo, has tied up with Equitas Small Finance Bank to launch zero-balance savings account that will offer a 7% interest rate on a minimum balance of ₹1 lakh.
According to the neobank, the new product, Freo Save, will allow customers to make informed financial decisions and strengthen their credit profile in the process.
Apart from facilities such as zero-balance and interest rate of 7%, the savings account will enable seamless integration with UPI to make funds transfer and bill payments easier.
Commenting on the launch, Anuj Kacker, co-founder Freo, said, “People have the power to analyse their spending patterns and take small steps that can help them build and bolster their credit score with just a little help. All our features are designed to achieve this purpose and provide users with the freedom to spend without fear and give them the added convenience to meet all of their aspirations."
To have access to credit, users right now have to maintain a good credit score, which is a parameter that reflects their financial credibility and likelihood of default. The only way to build a credit history is by getting a credit card or a loan. These have very different eligibility criteria and not everyone qualifies for these options.
According to the company, Freo Save has been designed to help individuals build a better credit score.
As per Vaibhav Joshi, chief digital officer, Equitas Small Finance Bank, the partnership with Freo will help elevate the future of financial services by reaching out to the youth, families and business people across India and introduce them to a new way to the bank via app-based banking solutions.
So far, under its MoneyTap service, Freo has disbursed loans of more than ₹4,400 crore to its users. MoneyTap offers a credit line of up to ₹5 lakh. Its services include Freo Pay, which offers a buy now pay later feature.
To make banking more convenient and meaningful, financial technology (fintech) startups are launching neobanks. These players partner with traditional banks and offer better solutions by using technology such as using artificial intelligence (AI) and machine learning (ML).
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