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How CRED’s oxygen drive really works

CRED has reported that 7.5 lakh members have pledged their CRED coins and helped deploy funds of Rs 10 crore to organisations such as Milaap, Hemkunt Foundation, and Give India. These organisations are placing orders for necessary equipment mainly oxygen concentrators for hospitals and healthcare organisations, and having them shipped this week.

As of May 3, 2021, the company has procured 450 concentrators designed to operate at a capacity of 5 litres per minute each and if run for 12 hours a day, they can generate an aggregate of more than 1.5 million litres per day.

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On April 26, CRED committed to distributing 1 billion litres of oxygen via oxygen concentrators to hospitals and healthcare non-profits across the country. The company raised funds by encouraging users to redeem CRED coins.

Here’s how the drive works.

The company has said that for every 10,000 CRED coins redeemed by its users, they will distribute 1,000 litres of oxygen via concentrators.

All funds raised will be transferred to Milaap, a crowdfunding platform that raises funds online for medical emergencies and social causes.

According to the company website, they have raised Rs 12,000 crore+ since inception in 2010. This money was raised via 400,000+ fundraisers and 5 million+ donations have been made till date.

Milaap has partnered with a number of hospitals and healthcare non-profits such as Swasth to effectively deploy funds to procure and distribute these concentrators.

CRED has earlier stated that details of the deployment would be published on a microsite that was scheduled to go live on May 3, 2021. However, at the time of filing this report, such a microsite was not available.

All contributors will receive an update on their email to understand the impact that their contribution has created.

Even if you are not a CRED member, you can donate directly via: https://milaap.org/fundraisers/cred

But how does it really work?

While many users have happily donated their CRED coins in support of the initiative, many have questioned how the initiative actually works in practice, considering that the problem is with oxygen supply and not demand.

Some users have done their own calculations and alleged that CRED’s math doesn’t add up.

In all fairness, CRED isn’t going to be hands-on in procuring and distributing oxygen concentrators. It is going to contribute all the proceeds raised from its users to the fundraising platform Milaap.

According to the information provided on the fundraiser page, Swasth Foundation is looking to raise Rs 1.5 crore to procure the concentrators and deploy the same in areas of great need. The process of distribution of concentrators will be transparent and published in the public domain so every donor can see the impact he has created. The effort has already secured 10,000 concentrators for immediate deployment and is currently raising funds to procure more.

Each high flow oxygen concentrator costs Rs 85,000 and each low flow concentrator costs Rs 45,000.

A contribution of Rs 45,000 will procure one low-flow concentrator that can treat and save the lives of up to 900 patients with mild to moderate illness.

A contribution of Rs 85,000 will procure one high-flow concentrator that can treat and save the lives of up to 550 patients with severe or critical illness. A high flow oxygen concentrator produces 10 litres of oxygen per minute.

Note: The prices here are indicative - Prices fluctuate every day and many times within a day.

“The estimated demand for concentrators in India is almost ~200,000 concentrators. Our target is to procure at least 50,000 concentrators through this initiative. Swasth has so far already procured 10,000 concentrators that will be deployed by May 1,” according to Swasth Foundation’s webpage.

If you visit the Swasth Foundation page ‘Oxygen for India’, you may get some more clarity on how they are using the donations, including procurement, logistics and distribution.

Here’s the math on CRED coins

CRED coins are essentially worthless outside of CRED’s ecosystem so the company is actually putting up its own money for the oxygen drive when its users redeem CRED coins. Why go this roundabout way? Well this is similar to initiatives by brands like Classmate notebooks (ITC ltd) where for every book sold Rs 1 is donated to educate children. To earn CRED coins you need to transact on CRED and the company is basically encouraging more users to engage with the brand via this initiative. We may assume that for every 10,000 CRED coins that are redeemed the company is putting up its own funds to procure and distribute oxygen via its partners.

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