As first reported by Live Mint, the Reserve Bank of India (RBI) has rejected fintech platform Cred’s application to increase its investment in the non-banking finance (NBFC) firm—Newtap Finance due to certain corporate governance and management issues. Currently, Cred holds 23.6% shares in the company whereas, its founder, Kunal Shah holds a 76% stake in the company. We have reached out to Cred to confirm its investment plans and their status and will update this report once we hear from them.
What is Newtap Finance?
Newtap Finance Private Limited (previously known as Parfait Finance & Investments Pvt. Ltd) is an RBI-registered NBFC and is partnered with Cred to use their services for, “customer acquisition, underwriting support, pricing support, servicing, monitoring, recovery of loan.” Cred’s founder, Shah, is one of the members of the company’s board of directors. The company was acquired by Shah in 2021 through his company Newtap Technologies where he holds the position of a director.
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Newtap technologies’ attempt to scale up:
Newtap Technologies was looking to raise $50-$70 million to help scale participation and credit exposure to the Cred user base back in May this year, according to an Inc42 report. It was also reported that Newtap Finance is looking for a CEO and will set up a new management team to operate as a full-service NBFC platform and work with lenders outside of Cred.