Budget 2020: Cred founder Kunal Shah calls for a focus on financial, credit literacy
Shah also talks about the challenges that Indian startups are facing at the moment with many of them collapsing after gaining some initial success.
Ahead of the Union Budget 2020, Cred founder and CEO Kunal Shah has called upon the government to focus on raising financial and credit literacy in the country.
"My worry is that we are growing nation with a lot of young people earning money and if we do not create a way for them to operate their money well, we will not create the next set of jobs. We will not create prosperity. There are going to be two key factors to achieve $5 trillion economy. First is we'll do economic reforms and make the businesses do well. But the per capita income has to grow. And per capita income is not going to grow by this increasing salary. Other sources of income and other things have to come," he said in an interview with Hindustan Times.
Shah also pointed out that the old-school concept of "saving" isn't necessarily investing. "We don't realise that if money lies around in an account, in a year's time, its value goes down. You don't understand this because the concept of inflation was not taught in our school… compound interest was taught in mathematics but its impacts on our everyday life were not taught. So, I think the first ask we have is to focus on financial literacy," he added.
Shah also touched upon the challenges that Indian startups are facing at the moment with many of them collapsing after gaining some initial success.
"I think one of the things that we have done poorly for the country is that we have not celebrated failures. And therefore fewer people take risks in this country, right? If more people took risks, we'll have more job creators. And now we only have job seekers," he commented.
"I think that one thing that needs to change is in terms of what trends and mistakes we have made. Look at the history of China, they used to all copy models from the West, implement it, build companies and have a lower success rate. Then they realised what their customers want. And they built for that," Shah explained.
Shah, who previously founded platforms such as Freecharge, had launched Cred in November 2018. The platform allows users to pay credit card bills and incentivises payments through virtual coins that can be later redeemed at other platforms.
When asked about an Entrackr report that stated Cred had zero revenue from its operations in FY19, Shah said, "See, in internet businesses what internet companies can do faster is to grow distribution. If they start focusing on revenue first, the speed of distribution slows down. For instance, TikTok came to India and got 50 million customers with no revenue. Jio launched in this country with no revenue. We don't ask these questions to them. But now when the distribution is done, you're like, oh, obviously, that was a reason."
"So, I think our view of startups is still seen and scrutinised with the lens of old businesses. Every internet business is focused on distribution first. In our case, honestly, the segment we have chosen, we can choose to monetise that. But focusing on distribution, making them feel valuable is first priority for us," he added.