Manish Shara on India’s Credit Challenges and How His Startup ZET is Helping Millions Avoid Debt Traps

India’s economy is growing and technology is advancing, but access to affordable credit remains out of reach for millions. Many people either lack a credit history or have poor credit scores. This results in rejections from banks or loans at extremely high interest rates. In a recent episode of The Simple Hai! show with financial journalist Vivek Law, Manish Shara, Co-founder and CEO of ZET, discussed how India’s credit problem is much deeper than just loan approvals. He explained that the real issue lies in affordability, awareness, and the need for responsible lending.

Credit Scores and Their Real Impact

Shara pointed out that a person’s credit score doesn’t just decide whether they get a loan, but also at what interest rate. In many cases, borrowers from low and middle-income groups end up paying extremely high rates, sometimes as high as 100% to 150% annually.

When Vivek Law highlighted that India’s credit card penetration is only 5%, Shara explained why:

• Traditional banks operate on a branch-heavy, high-cost model, designed mainly for high-income earners (INR 1 lakh per month and above).
• This leaves out nearly 35 to 40 crore Indians who earn between INR 20,000 and INR 35,000 a month, most of whom are self-employed.

Such people often face rejection or are forced into informal borrowing from moneylenders or digital apps at exploitative interest rates.

Who Are the Underserved?

India’s employment structure adds to this challenge. According to Shara:

• 60–70% of India’s workforce is self-employed.
• 13–14% are casual workers without fixed salaries.

For banks, evaluating repayment ability in these groups is difficult. As a result, millions of Indians remain outside the formal credit system and end up borrowing informally at steep rates.

“This is a systematic struggle most Indians face when it comes to credit,” Shara said.

Zet’s Mission: Democratise Credit Access

Shara explained that Zet’s mission is clear:

“We want every Indian to have a credit score, and more importantly, a good credit score that enables affordable credit access.”

Here’s how Zet is solving the problem:

• FD-backed Credit Card: Zet offers a RuPay credit card secured by a fixed deposit starting at just INR 5,000. The card provides a credit limit of up to 90% of the FD amount.
• Partnerships with Banks: For example, Zet works with SBM Bank India to make these products widely available.
• Credit Report Dispute Services: Zet helps customers fix errors on credit reports, such as being wrongly penalised for someone else’s default.

This product is especially useful for self-employed individuals earning between INR 20,000 and INR 35,000 who are otherwise denied credit cards by traditional banks.

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Education and Responsible Credit Use

Shara stressed that credit is powerful but dangerous if misused. Many Indians are unaware of how credit scores work or the risks associated with revolving credit.

ZET tackles this with:

• AI-generated videos in local languages to explain credit reports.
• In-app alerts when a customer’s utilisation crosses 40%, helping them protect their score.
• Counselling from credit experts who advise users on whether they should even take credit in the first place.

He warned against the “minimum due” trap, where people pay only a fraction of their bill, but end up paying over 2% interest monthly. “This leads to unmanageable debt, stress, and in some cases, even suicides,” Shara said.

Because Zet cards are FD-backed, and users are continuously educated, the risk of debt traps is reduced.

Real-Life Uses of the Zet Credit Card

So, how do people actually use Zet’s credit card? According to Shara:

• Daily Expenses: groceries, utility bills, and regular household needs.
• Savings on Fees: Many UPI apps charge convenience fees, which Zet users avoid.
• Discounts on E-commerce Platforms: extra savings while shopping online.
• Entrepreneurs and Freelancers: Many platforms require credit card payments. With Zet, small business owners can pay, save on business offers, and build a credit history.

The Future of Credit in India

Shara believes that India’s future lies in inclusive credit, affordability, and education.
“Credit should be a tool that helps people grow, not a trap that pulls them down. Education, awareness, and systemic innovation are the keys to bridging this massive gap,” he concluded.

With models like Zet’s, India’s underserved population can look forward to fairer, more transparent, and more accessible credit opportunities.