The time consuming and inflexible process in banks has led to a rise of an industry that has become a viable alternative to replace them. Peer to Peer lending process works through an online platform which connects the borrowers and lenders. This platform does not use its own funds but acts as a facilitator between the two. Instead of going to the banks, applying for a loan and giving them a high interest rate, people have started using P2P platform to get loans instantly and at low interest rates. To give this culture a much required kickstart in the country, RupaiyaExchange came into play.
RupaiyaExchange, founded by Rohan Hazrati in November 2015, the company is a P2P lending platform. On the same, Rohan quoted, “The whole essence of this project is to make people talk about financial inclusion. There are a lot of people untouched by the financial institutions because of the lack of some documents or they don’t meet the criteria set by these institutions.”
Rohan has a finance background, he has been associated with a German company as CFO for over 5 years. Prior to this Rohan has worked with Ernst and Young as consultant.
The Introduction of ‘Lender Protection Fund’
The most important question was, ‘How to make lenders comfortable?’, so Rohan stated that instead of just going the traditional checks, they conduct a social search of the borrower too. Then the company makes a predictive analysis to make sure that the concerned person is able to repay the loan.
On the other hand, this platform is a good idea for people who are just tired of the same interest rates from these financial institutions. The entire concept of the company is connecting borrowers with lenders easily.
Talking to Rohan on the problems he has faced, he says, “The product is new, the concept is new, it’s a little difficult to establish trust between the lenders and borrowers. Also, to make them understand the advantages this system carries is another task.”
The company has established a ‘Lender Protection Fund’ to help lenders be at the risk-free side by protecting their principal amount. Once the borrower fails to repay the money, the principal is paid by this fund to the lender.
Traction, Monetisation and Funding
The company claims to have more than 300 users, in terms of applications, the company has received applications worth Rs 2.8 crore.
The company is currently being bootstrapped by the founder. When asked about the fund needs, Rohan told that they are looking for funds and will be needing it in another three months to improve technology and boost man power.
RupaiyaExchange charges from borrowers according to its slab, while the lenders are allowed to lend for free. In the coming future the company plans to charge its lenders too with 0.5 to 1 percent of the total investment.
Faircent, another P2P lending platform, has already raised $4.5 million in three rounds, from investors like TV Mohandas Pai, M & S Partners etc. Other potent competitors include Lendbox, Cashkumar, i-lend and Easyrupaiya.