Slice Launches $27 Credit Limit Cards in India

Credit Card Access in India: A New Approach

Despite a large number of Indians possessing bank accounts – numbering in the hundreds of millions – credit card ownership remains limited to approximately 30 million individuals. The rate of adoption for these cards has experienced minimal growth within the South Asian nation over recent years.

India’s credit-rating infrastructure is still developing, currently encompassing only a small percentage of the total population. Furthermore, financial institutions often lack both the advanced systems for assessing creditworthiness and the willingness to accept higher levels of risk when extending credit.

Slice's Innovative Solution

Slice, a startup headquartered in Bangalore, proposes a novel solution to this challenge. Leveraging its experience in providing cards to young professionals in non-traditional employment, the company announced on Wednesday the launch of a new card featuring a default credit limit of 2,000 Indian rupees (equivalent to $27).

This initiative aims to reach a potential market of 200 million individuals within India. Rajan Bajaj, founder and CEO of Slice, explained that the lower credit limit is specifically designed for individuals with limited or no credit history, facilitating the gradual building of a positive credit score.

Card Features and Benefits

Slice is currently distributing around 100,000 of its flagship "supercards" to new users each month. The new card will mirror the benefits of the supercard, without any joining or annual fees.

The ability to offer this card is attributed to the startup’s investment in developing its own proprietary credit underwriting system. This system is crucial for managing risk effectively.

Robust Risk Management is key to scaling this type of business and creating a truly inclusive financial product. Bajaj stated, “We have actively invested in building a strong risk infrastructure by leveraging data science. Once the capability is built, no one can take the growth away from you.”

Currently, the company reports a monthly growth rate of 50%, with a non-performing asset (NPA) rate of less than 2%, demonstrating the effectiveness of its credit underwriting processes.

Strategic Credit Limit and Future Growth

The $27 credit limit was determined to be a practical amount that allows users to conduct meaningful transactions. Proper utilization and timely payments will enable users to qualify for increased credit limits.

“We are confident this will encourage users to provide us with extra information that we need to increase their credit limit,” Bajaj shared in a recent interview.

Slice intends to issue approximately 1 million of these new cards by the end of March of the following year, following a recent $20 million funding round.

Potential for Further Investment

The startup is also exploring the possibility of securing additional funding. Investors are reportedly interested in participating in a new funding round of around $100 million, potentially at a valuation exceeding that of the previous round.

Rajan Bajaj declined to comment on ongoing discussions regarding potential fundraising activities.