FreeCharge’s customers will now be able to invest in mutual funds through its partnership with Reliance Mutual Fund. To invest through FreeCharge, a KYC compliant customer needs to enter their PAN number, bank account number and other details and the folio of the customer will be generated.
For non-KYC customers, the KYC can also be done online instantly through FreeCharge by using the Adhaar number linked with the subsriber’s currently active mobile number.
The initial subscription for the mutual fund starts at Rs 500 and further investments can be as low as Rs 100. The scheme will invest in ultra-short term debt funds, which are traditionally safer and return higher post tax returns than fixed deposits and savings accounts.
“We will, in future, also diversify in other financial services offerings keeping our customers’ requirements in mind,” Freecharge CEO Govind Rajan said in the statement. Note that Snapdeal, which owns Freecharge, runs a lending programme for sellers called Capital Assist and has partnered with over 12 banks and NBFCs including Axis Bank, ICICI Bank, HDFC Bank, RBL, Religare and L&T Finance for funding this initiative.
Note that rival MobiKwik had said that it would be entering the lending space back in October in a bid to offer more financial services. However while checking the app, it did not show any options for loans. The lending business was supposed to have two options: An EMI model and a loan model. The EMI model could be used for purchases such as laptops and mobile phones on online websites which support MobiKwik while the loan model could be used for any purpose. Initially, MobiKwik is planning to give out loans worth Rs 50,000.
Paytm, on the other hand, has a payments bank licence. Though they cannot undertake any lending operations, they can however partner with other companies to distribute other products such as mutual funds and other loan products.