Скачать или смотреть CRED Founder Kunal Shah Interview with Aashay Doshi: Fintech, Financial Literacy, & Inclusion

Topic: CRED, Fintech, Financial Literacy & Inclusion:

Summary:

Key Stats and India's Status Driven Society

A Real Understanding of India: While everyone focuses on India's 'billion customers', reality is that 1% of Indian households (25M people) control 70 - 80% of discretionary spends in the country. Hence, companies can get millions of Daily Active Users (DAU) in India, but the Average Revenue Per User can only come from targeted niches in the country. While our per capita income is $2000, if you remove the top 1%, it falls to $800. Our median per capita income is $600.

India's Financial Ecosystem: Over 80% of Indians now have bank accounts; UPI records 2B+ transactions monthly; 600M RuPay cards have been issued in the country. Now the real question is: how effectively are these accounts being used? What is the gender gap in usage? What will it take to enhance financial literacy in the country? How can we graduate to using more sophisticated financial instruments and become a mature, consumption driven society?

India's Status Driven Society: While India should be focusing on wealth creation, we are more focused on status / ego enhancement. A few examples: living room furniture has 3x the margins than bedroom furniture ; we worship politicians and film stars more than we worship wealth creators because we like to look up to 'heroes'.

Financial Literacy and Scaling Responsible Behaviour:
According to RBI estimates, only 27% of Indians are financially literate. This is a shockingly low number because it also includes affluent families who might have high income, but have very limited financial literacy. There is no correlation between high income and high financial literacy

Improving Literacy through Content: Our education system guarantees us being good at math, but bad at money management. We need more focus on personal finance, cash flow management, critical thinking, and 'truth seeking'. In Israel, most mother's raise their children to win nobel prizes and daily ask them the question 'what is the most insightful question you asked in school today?'.

Lack of Stock Market / Mutual Funds Participation: Only 20M people in India participate in the stock market, and ~25M invest in mutual funds. That is only 2% of the population. Majority of Indians put money in Gold - which is not sustainable as it locks up funds that should be deployed in the system. This leads to increased cost of capital and interest rates, and drains a country's wealth. Campaigns such as 'Mutual Funds Sahi Hai' are effective but we need holistic solutions to work in parallel to change behaviour
Financial Inclusion and Women Empowerment

Worrying Women Labour Participation: Only 15% of urban women are employed in India, compared to 90% in China. This is extremely worrying because almost 50% of the population is being excluded from the formal financial system / economy. RBI estimates that if 100M low income women are serviced, we can add ~Rs. 25,000 Crores in deposits to the banking system. This is a big gap we have to fill

Arranged Marriages and Effect on Entrepreneurship: Because women are not working, they look for 'stable and settled' men to get married to. Families don't want their daughters to get married to men who are on the risky entrepreneurial paths - this is leading to fewer men pursuing entrepreneurship.

CRED Mint and India's Wealth Driven Society
The Fallacy of MRP in India: If India is truly serious about being a capitalist country, we need to get rid of the MRP concept. Why should someone in a high income area pay the same for fuel as someone in a low income area? Pricing should be dictated by the market, not by the government. In the US, every petrol pump station has different pricing depending on location, services, etc.

Problems with Return OF Capital and Legal Woes: In India, return OF capital is more of a focus than return ON capital. We have low faith in our judicial institutions because we don't have the legal capacity to enforce contracts, payments, etc. This leads to us focusing on status and relationships in order to navigate the bureaucracy. This causes extreme inefficiencies in the overall system. It is part of the reason Indians spend so heavily on weddings - because it maintains status and relationships. This spending is better used in broader consumption avenues

Low Trust, High Concentration: Because we are a low trust nation, we tend to focus our faith and money in concentrated areas (Tata can sell cars, salt, tea, etc and we will buy only from them because trust is a big factor). In Bollywood, 15 actors generate ~80% of revenue. As we morph into a more mature economy, we will spread success rates to diversified businesses and individuals, thereby increasing our prosperity