They are the eBay for loans
Imagine if you could get rid of the bank and directly lend to those in need. You could potentially arrive at a rate like 13%, which is hugely beneficial to both lender and borrower.
Faircent and i-lend are technology platforms that enable such peer-to-peer lending. Faircent, which became operational three months ago, is founded by three professionals Rajat Gandhi, who was part of the early founding team of Indiatimes; Vinay Mathews, who held major responsibilities at Timesjobs and Sify Technologies; and Nitin Gupta, who served as CEO of MasterCard (South Asia).
i-lend, which became operational last year, is founded by VVSSB Shankar and Niti Gupta, both previously with TVS Electronics, and Gaurav Chopra, who worked with Capital One Bank in Europe.
"Banks don't give a fair rate of interest. That whole system is opaque. Our platform allows you to bid for a rate, and is very transparent. We are the eBay for loans," says Gandhi.
In the US, the most popular peer-to-peer lending platform is Lending Club, which is in the process of going for an IPO. Founded in 2006, it last year had revenue of $98 million and its most recent private-company valuation stood at $3.8 billion. Google invested $125 million last year for a 5% stake. As of June 30, loans worth over $5 billion were funded through it.
In India, most such ventures, including Microgram and Milaap, have focused on raising money from high networth individuals to finance those at the lower end of the income ladder. Faircent and i-lend, on the other hand, are like auction platforms for anybody. Faircent has some 225 lenders and 800 borrowers registered with it, and has seen Rs 15 lakh worth of transactions in the past three months. i-lend has 1,975 borrowers and 800 lenders registered with it, and has seen Rs 12 lakh worth of loans disbursed. Borrowers in Faircent are currently restricted to Delhi and in i-lend to Hyderabad, since both are in pilot stages.
Only personal loans are allowed; and these can't exceed Rs 2 lakh in i-lend's case and Rs 5 lakh in Faircent's case. The companies do a due diligence of borrowers to ascertain credit worthiness, and all details, including Cibil scores, are available to lenders. But the companies don't stand guarantee for repayment. The companies help draft legal contracts, and they charge a fee for their services.
"We try to ensure that a loan is serviced by multiple lenders in order to reduce risk for lenders," Gandhi says.
Shankar says borrowers in India are still not used to self-service. "They expect people to come to their doorstep and collect documents, fill forms. A lot of user education is required," he says.
Imagine if you could get rid of the bank and directly lend to those in need. You could potentially arrive at a rate like 13%, which is hugely beneficial to both lender and borrower.
Faircent and i-lend are technology platforms that enable such peer-to-peer lending. Faircent, which became operational three months ago, is founded by three professionals Rajat Gandhi, who was part of the early founding team of Indiatimes; Vinay Mathews, who held major responsibilities at Timesjobs and Sify Technologies; and Nitin Gupta, who served as CEO of MasterCard (South Asia).
i-lend, which became operational last year, is founded by VVSSB Shankar and Niti Gupta, both previously with TVS Electronics, and Gaurav Chopra, who worked with Capital One Bank in Europe.
"Banks don't give a fair rate of interest. That whole system is opaque. Our platform allows you to bid for a rate, and is very transparent. We are the eBay for loans," says Gandhi.
In the US, the most popular peer-to-peer lending platform is Lending Club, which is in the process of going for an IPO. Founded in 2006, it last year had revenue of $98 million and its most recent private-company valuation stood at $3.8 billion. Google invested $125 million last year for a 5% stake. As of June 30, loans worth over $5 billion were funded through it.
In India, most such ventures, including Microgram and Milaap, have focused on raising money from high networth individuals to finance those at the lower end of the income ladder. Faircent and i-lend, on the other hand, are like auction platforms for anybody. Faircent has some 225 lenders and 800 borrowers registered with it, and has seen Rs 15 lakh worth of transactions in the past three months. i-lend has 1,975 borrowers and 800 lenders registered with it, and has seen Rs 12 lakh worth of loans disbursed. Borrowers in Faircent are currently restricted to Delhi and in i-lend to Hyderabad, since both are in pilot stages.
Only personal loans are allowed; and these can't exceed Rs 2 lakh in i-lend's case and Rs 5 lakh in Faircent's case. The companies do a due diligence of borrowers to ascertain credit worthiness, and all details, including Cibil scores, are available to lenders. But the companies don't stand guarantee for repayment. The companies help draft legal contracts, and they charge a fee for their services.
"We try to ensure that a loan is serviced by multiple lenders in order to reduce risk for lenders," Gandhi says.
Shankar says borrowers in India are still not used to self-service. "They expect people to come to their doorstep and collect documents, fill forms. A lot of user education is required," he says.
Posts
No comments:
Post a Comment