RBI Tightens P2P Lending Rules As Several Lending Platforms Violating Norms

The Reserve Bank of India (RBI) has recently tightened regulations for peer-to-peer (P2P) lending platforms to enhance transparency and protect investors.

The Central Bank has reviewed and updated the Master Direction for Non-Banking Financial Company – Peer to Peer Lending Platform (Reserve Bank) Directions, 2017.

According to the recent circular, RBI said some of the entities adopted certain practices which are in violation of its regulations. “Such practices include, among others, violation of the prescribed funds transfer mechanism, promoting peer-to-peer lending as an investment product with features like tenure-linked assured minimum returns, providing liquidity options and at times acting like deposit takers and lenders, instead of being a platform,” it said.

The original master direction on NBFC – P2P lending platform (Reserve Bank) Directions, 2017, laid out clear rules for the operation of P2P lending platforms which serve as intermediaries in facilitating online transactions between lenders and borrowers.

However, RBI said it observed deviations from these rules, including violations related to funds transfer mechanisms, promoting P2P lending as an investment product, and practices resembling deposit-taking. To address these concerns, RBI revised and clarified several provisions of the directions

Here are the key changes, RBI has made

1. Credit Risk Prohibition: P2P platforms are now prohibited from assuming any credit risks. 

2. No Credit Enhancements or Guarantees: These platforms cannot offer credit enhancements or provide guarantees.

3. Investment Cap: Individual lenders are restricted from investing more than ₹50 lakh cumulatively through P2P platforms.

4. Disclosure Requirements: Platforms must disclose any losses borne by lenders on principal or interest.

5. Prohibition on Cross-Selling: P2P platforms cannot cross-sell insurance products related to credit enhancement or guarantees.

These updates aim to create a safer and more transparent environment for both lenders and borrowers.

Millennial Women's Investments in P2P Lending Rises by 430% - Study

• 30% and 150% rise in women investors and borrowers respectively in FY 21-22
• Mumbai and Hyderabad ranked top in terms of women investing in P2P lending
• Witnesses 150% Y-o-Y growth in women borrowers across the country
• More than 36% of all female borrowers returned to reapply for a loan
• With only a 3.37% default rate; women prove to be better borrowers than men

Mumbai, India's financial city, ranked top, followed by Hyderabad, the city of Nizams, in terms of the highest number of women borrowing from P2P lending platforms as per the data. LenDenClub, the country's leading Peer-to-Peer (P2P) Lending platform, released the report of women investors and borrowers on the P2P lending platform. The data further revealed that Mumbai, Bangalore and Hyderabad lead the race in terms of women investing in P2P space.

According to analysis, there has been a whopping 430% rise in women investors in the P2P lending space in the financial year 2022 compared with FY21. There has also seen a 150% increase in women borrowers on the borrower side y-o-y basis. The study was conducted on the data from 20,165 women investors and borrowers in P2P lending for the period April 2021 to March 2022.

The report further revealed that young and social media-friendly women are much ahead of previous generations when it comes to borrowing or even availing of the P2P lending platform as an investment asset class. Millennial women aged 21-30 years were the most active borrowers, i.e. 56%, and lenders, i.e. 54%. It was followed by the cohort in the age group of 31-40 years that accounted for 37% and 33% in the case of borrowers and lenders, respectively.

Data highlights that Peer-to-Peer (P2P) Lending is fast emerging as an alternative investment option for women. According to the study, the highest number, i.e. over 50% of women, fall in the age group of 31 to 40, and the average amount invested is INR 50,000 in P2P lending. Of the women who invested in the platform, 100% of them re-invested their money. Female investors in P2P come from metro cities. Hyderabad, Bangalore and Mumbai are the top cities where these women lenders invested in the asset class.

With rising education and awareness levels of financial products, an increasing number of women have appeared to take their own financial decisions. Indian women were perceived to be disinterested and unaware of their financial management, but the situation seems to be changing amid the pandemic.

Due to the pandemic, women mostly borrowed from medical emergencies to care for themselves and their family's healthcare. Data revealed that most women borrowed from the platform in the month of April 2021, when Covid's second wave was at its peak. Women also borrowed money for educational purposes indicating that they are career-focused and planning their future effectively by availing credit facilities from P2P lending platforms. The data revealed that Hyderabad & Mumbai were the top cities where the most women benefited from credit.

Women seem to be more particular about repayment of their loans, resulting in LenDenClub experiencing only 3.37% of women delayed or defaulted in the payment. They borrowed amounts as high as Rs 7 lakh and as low as Rs 10,000, whereas the average ticket size of borrowing stood at Rs.70,000. The platform saw over 50% of women borrowers fall between 21 to 30 years of age, indicating that women from Gen-Z and millennial cohort, who are also more acquainted with technology, are comfortable taking digital loans.

Bhavin Patel, Cofounder and CEO of LenDenClub, "We have witnessed a rise in investments from women, especially during the pandemic. The P2P lending space is regulated by RBI and awareness about it is still low among the women counterpart. It has emerged as a better asset class for the investors and source credit during emergencies for the borrowers.

We believe that more awareness about the platform will increase participation from women in tier-1 and tier-2 cities. The easy access to online avenues of financial independence encourages women to make their own financial decisions. India can achieve better financial inclusion with more participation from women. We, at LenDenClub, help our women investors diversify their portfolios with high investment rates, while we encourage women borrowers to take out instant loans in times of need."

About LenDenClub

LenDenClub is a leading peer-to-peer lending platform that provides an alternate investment opportunity to investors or lenders looking for high returns with creditworthy borrowers looking for short term personal loans. With 1 million+ investors on board, LenDenClub has become a go-to platform to earn returns in the range of 10%-12%. LenDenClub offers investors a convenient medium to browse thousands of borrower profiles to achieve better returns than traditional asset classes. Moreover, LenDenClub is safeguarded by market volatility and inflation. LenDenClub provides a great way to diversify your investment portfolio.

Additionally, with more than 2.5 million+ borrowers, InstaMoney, its borrowing platform has disbursed over Rs. 2,000 crores of loans to date. It offers instant personal loans to salaried individuals with flexible loan tenure. The platform aims to foster financial inclusion by leveraging technology to support borrowers with hassle-free loans, even in the remotest parts of the country. InstamMoney also provides small merchant loans of up to Rs. 1,50,000 to borrowers who are into SME business. Through InstaMoney’s partnership with merchants, Instamoney also extends the popular service of Buy Now Pay Later to the end consumers or shoppers.

LenDenClub is Now The 1st P2P Lending Platform on Google Pay

• LenDenClub is now the first P2P lending platform on Google Pay
• Offers twin spots on GPay - 'InstaMoney' for borrowers and 'LenDenClub' for investors
• GPay customers can now lend and borrow through LenDenClub as seamlessly as making payments through the existing platform
• Company has one of the lowest NPA in the digital lending space at 3.4%

Mumbai, March 25, 2020: LenDenClub, one of the leading peer-to-peer (P2P) lending platforms in India, today said that it has integrated with Google Pay and is now live on its platform. It is the first P2P lending company to integrate with the tech platform. With this integration, customers of GPay can now lend and borrow through LenDenClub as seamlessly as they can make payments through the platform.

LenDenClub offers borrowers hassle-free loans, even in the remotest parts of the country. It is one of those rare lending apps to offer loans across 19,000 pin codes across the country; higher than some of the banks as well. With its integration on GPay, users can now access services offered by the brand right from the Google Pay app interface. Borrowers can visit the 'InstaMoney' spot on GPay and get loans ranging anywhere between Rs. 5,000/- to Rs. 12,500/- transferred to one's bank account within minutes. Similarly investors can visit the 'LenDenClub' spot on GPay and invest as low as Rs. 500 thereby offering loans to borrowers directly. The invest option will be live in a few days.

The Spot feature is currently available on Android, while the iOS version will be launched in the coming months.

Speaking on occasion, Bhavin Patel, Co-founder & CEO, LenDenClub, said, "LenDenClub is extremely excited to be live on Google Pay. It goes along with our vision of delivering financial products through technology. Being the first P2P player to integrate with GPay, offers us access to over 60-70 million active GPay users monthly on both the demand and supply side of our business. With more and more people in the country getting used to the idea of shopping and transacting online, a large portion are now also seeking credit digitally. We are confident to add value to Google Pay's customers through this collaboration."

LenDenClub has been critical in serving the marginalised and offering credit to those left out of the country's financial services fold. Additionally, the platform offers an excellent alternative investment opportunity for investors to lend on its platform and earn net returns up to 15% p.a., superior to most of the other investment products available.

The company currently has a loan book of more than Rs. 500 Cr., with an average ticket size of Rs. 25,000. It has arranged more than Rs. 1,000 Cr. worth of loans by more than 1.5 lakhs lenders on the platform. Betting big on the P2P lending space, especially in a post-Covid scenario, the company recently expanded its flagship digital lending platform InstaMoney from its presence in 7 states to pan-India. The company has one of the lowest NPA in the digital lending space at 3.4% as on 30th December 2020.

About LenDenClub

LenDenClub is the largest peer-to-peer platform in India, having disbursed more than ₹500 crores worth of loans. It aims to foster financial inclusion by leveraging technology to support borrowers with hassle-free loans, even in the remotest parts of the country, while providing a new-age investment option for investors. Listing only pre-verified loans, LenDenClub offers investors a convenient medium to browse thousands of loans to earn better than fixed deposits, mutual funds etc. With a 100% funding record for its borrowers, LenDenClub currently enjoys a user base of one and a half million and disburses on an average 2.5 lakh loans annually. While the platform hosts investors and borrowers across India.

An application offered by LenDenClub, InstaMoney is the go-to platform for salaried borrowers to avail instant personal loans. The platform offers you quick loans at an interest rate ranging between 0% (minimum for no cost EMI finance) to 2.99% (maximum) per month for a tenure of 3-5 months. The loan amount offered under the category ranges between Rs. 5000 & Rs. 15000 and is applicable for people without any default/write-off in past. LenDenClub also offers small merchant loans to borrowers who are into businesses. The loan amount goes upto ₹1,50,000 in case of merchant loans. An extremely user-friendly process, their mobile applications only require basic KYC details, and the applicant's salary bank statement. Since InstaMoney does not require any credit history, it is a more accessible route for instant personal loans than banks.

Bank of Baroda Launches Digital Lending Platform Aimed at Paperless Process for Retail Customers

Bank of Baroda, country’s third largest public sector bank, has launched the Digital Lending Platform, which enables prospective retail loan seekers to get loans digitally through a paperless process at the convenience of their place and time of choice.

 
Pre-approved Micro Personal Loan is offered to existing selected customers to shop anything through offline / online partner channels and pay later in easy EMIs. Customers can also avail the amount into their Savings bank account and convert it to EMIs from 3 to 18 months through m-Connect+ (Bank’s mobile banking app) in 60 seconds.

Shri. Vikramaditya Singh Khichi, Executive Director, said, “The primary objective is to provide exceptional customer experience, personalized customer journeys and scale the lending business through digitization. Bank has attempted to digitize itself internally by building a high-performing, innovative environment, which has allowed bank to reduce time-to-market for their products. Bank envisages to outpace the banking industry growth by 1.50 times at CAGR of 16% over next 5 years by adopting digital first lending approach across retail, MSME and agriculture segments.”

Further, the Digital Lending Platform provides ‘In Principle approval’ for Home Loan, Car loan and Personal Loan in 30 minutes without human intervention. The digital loan process is done from the various sources of the loan applicant’s financial profile and the applicant will get ‘In Principle approval’ in 4 simple steps. The prospective applicants can avail the facility through multiple channels - website, mobile banking, internet banking and social media as well.
 
The Bank will offer ‘Online Loan against Fixed Deposits’ through Digital Lending Platform, which enables the Fixed Deposit customers to avail loan against their Online FD instantly through mobile banking and net banking facility.
 
With launch of Digital lending Platform, Bank believes that personal loan disbursements will be completely digitized first followed by MSME and Agriculture disbursements. As such Bank envisages that the digital share of disbursement in retail lending will grow to 74% over 5 years.
 
Dr. Ramjass Yadav, Chief General Manager, Bank of Baroda said, “We endeavour to accelerate our digital journey and continue to invest and innovate to transform Bank into a completely digitised organisation. Digital lending platform will help the Bank to double the non-corporate book by 2025.”
 
Shri. Akhil Handa, Head- Fintech, Mobility and Digital Lending Dept. Bank of Baroda said, “Our aim is to reposition existing operating models with a ‘Digital First’ model and to achieve this, we will rapidly launch new products to serve our increasingly digital customer base.”

InCred Raises ₹ 500 Cr, Looking to Boost Lending Across Segments

InCred, the new-age financial services platform that provides Consumer and MSME loans, has raised Rs. 500 crores debt funding from various public sector banks and public financial institutions. The debt issuance took the form of Term Loans, NCDs (under LTRO and PCG scheme) and Market Linked Debentures. This round of debt financing will boost InCred’s lending expansion across select segments in the Consumer, Education and MSME markets.

This funding comes within a month of the news of the fintech lender acquiring fintech platform Qbera to augment its digital distribution capabilities.

Speaking on the development, Mr. Vivek Bansal, Group CFO of InCred said “InCred is strengthening its funding base to support its growth vision. The recently concluded debt issuance is an endorsement of our business model, risk and analytics philosophy, and our prudent ALM policies.”

InCred had earlier raised Rs 600 crore equity Series A funding round which was led by Dutch

development finance institution FMO, the round also saw participation from US-based asset

manager Moore Capital, India/Latin America-focused PE fund Elevar, and Alpha Capital (an early- stage investor of InCred). InCred has an equity base of over 1,000 crores with a marquee investor roster including the Dutch development bank FMO, Moore Capital from the USA, Investcorp Bahrain, Oaks Capital and others including Dr. Ranjan Pai of Manipal and Anshu Jain, Ex CEO of Deutsche Bank.

Since its inception in 2016, InCred has added over 500,000 customers in 20 plus cities across India and has established a strong reputation in the market for its risk management capabilities and cutting edge tech backbone.

About InCred:
InCred is a new-age financial services group founded with the vision of providing credit to Incredible India and thus, furthering financial inclusion in the country. The company endeavors to disrupt the status quo in traditional lending that seems to exclude those most in need of credit, due to outdated, rigid, and often inefficient processes. The company has designed its products with a razor-sharp focus on serving the unique needs of these under-served segments of customers and leverages technology and data-science to make lending quick, simple, and hassle-free. It aspires to be the key partner for all financial requirements of an Indian family. 

Founded in the year 2016 by Bhupinder Singh, former head of Investment Banking Deutsche Bank Asia-Pacific, the company launched market operations in January 2017.

InCred offers a broad portfolio of products that cut across key categories such as Personal Loans, SME Loans & Education Loans

Post Covid-19: Non-bank Lending will Grow in Asia

The COVID-19 pandemic has significantly changed the psychology of average borrowers. One of the near-time effects will be the growth of non-bank lending. According to a customer survey of Robocash Group in Asia, 50% of respondents say about a higher need for financing. Moreover, the decrease in incomes during quarantine has prepared 45% for active borrowing when restrictions are lifted. At the same time, the other 9% will be motivated by the desire to satisfy their hunger for consumption.

To assess the psychological impact of the pandemic on the future credit activity of borrowers, company analysts identified nine main factors evaluating their positive and negative influence on a 5-point scale. Besides, the results of online customer surveys in the Philippines, Indonesia, Vietnam and India were taken into account.

On the background of the increased need for financing amid the pandemic due to various reasons among half of the respondents, one in four (28%) faced a real drop in income. The decline in financial wealth of the population became the main factor, which reduced the demand for all types of loans during the active phase of the quarantine. Other factors such as overall insecurity and anxiety, established habits to keep social distance and cut down on expenses have strengthened it. The effect will be long-term. Combined with tightened scoring requirements, it will also prevent a sharp surge in lending after the removal of restrictions.

However, the broader usage of digital services with the growing deferred consumption will still gradually prevail over the habits to social isolation and lower spending. The survey results confirm it. An increase in the volume of deferred expenses and the need for money has become stressful for many people. Thus, it will encourage 45% of respondents to borrow more in the post-COVID-19 period. Then, 9% of the surveyed are more likely to resume borrowing because they miss the usual spending.

Analysts of the company added: “Coronavirus has only expedited the expansion of digital and Internet services, boosting the demand for apps providing remote communications, video streaming, online shopping, etc. It has produced a solid base for the further penetration of non-cash payments and fintech.”

Although a far more complex set of factors will affect the outcome such as government policies, the state of alternative lending, the adaptation of traditional banks to the changes etc, psychological and related points allow predicting an increase in volumes for non-bank lending after the complete removal of restrictions. As the findings show, it won't be sharp but steady.

Datacultr enabling NBFCs to Lend to 'New-to-Credit' Customers

With its proprietary technology, Datacultr, a Platform-as-a-Service(PaaS) provider, is enabling leading Non-Banking Financial Companies (NBFCs) in India to meet new credit demands and ensuring the sector moves forward with the same vigor post- lockdown. 

In India, millions of migrant workers with no other sources of income and low or no savings have been displaced and are battling to survive. Hence, the need of the hour is to provide financial support to these people. In this situation, NBFCs are actively working out for solutions to disburse small ticket size loans. Moreover, using Datacultr’s machine learning technology, they are able to reduce their risk on lending to this segment. Datacultr equips them with its Predictive Fraud Management and Collection Digitization solutions. 

Commenting on the same, Neel Juriasingani, CEO and Co-founder, Datacultr said, “The way COVID-19 disaster impacted the businesses and the economy, it has created a liquidity crunch in the ecosystem. At this time, a healthy and growing NBFC sector is an important pillar to facilitate the increased credit demand in the economy. Using technology, they can further strengthen their business model, and ensure continuous flow of credit for micro, small and medium enterprises as well as individuals and contribute significantly to financial inclusion in the country”. 

Datacultr empowers financial institutions with effective collections solutions and supports them to expand their books to ‘New to Credit’ across nooks and corners of the country. It’s proprietary product has enabled NBFCs to connect with its customers, using their mobiles devices throughout the tenure of the loan. Allowing them to make data-driven behavioural interventions throughout the life-cycle, to communicate, remind, educate & in gradual impairment of the device experience, if a user defaults.

About Datacultr

Datacultr is a PaaS that allows consumer lending companies to significantly reduce their risk on 'New to Credit' customers. Datacultr allows the lender to give out unsecured loans, at a lower risk, by allowing borrowers to present their newly purchased or existing Smartphone as collateral.

For the Unbanked & Underserved user, such loans that ride on Datacultr’s technology begin their journey of building a robust credit score, enabling access to bigger loans in the future.

Datacultr is part of Microsoft for Startups & Google Cloud for Startups. It is the winner of Emerge 50, 2018 award, given by NASSCOM to India’s Most Innovative Top 50 Emerging Software Product Companies. Moreover, it was recognised by the Haryana Government for product excellence in 2019 and also won the prestigious Red Herring 2019 Top 100 Asia award. The team consists of well-experienced members from the telecom and mobile OEM space, with a deep understanding of consumers in emerging markets and have vast expertise in building scalable technology platforms.

Digital Lenders Association Issues Stricter Code Of Conduct to Safeguard end customers Privacy of Customers and Unethical Collection Practices take Centre Stage

In recent weeks, Digital Lenders’ Association of India (DLAI) has issued a fresh code of conduct for all its members emphasizing the need to propagate responsible lending practices and to ensure ethical collection practices are in place especially given the challenging macro-economic environment in the country.

This new Code of Conduct is a set of principles, processes and guidelines that are binding on every member of the DLAI in order to ensure ethical and responsible behaviour by all and everyone needs to abide by the same. The purpose of this Code of Conduct is to ensure that the digital lending industry creates common safeguards of customer interests. For examples, the new guidelines make it clear that a lender cannot build unethical features into their products such as excessively high (and non-transparent) late payment fees.

DLAI members collectively serve more than 50 million borrowers in this country. These borrowers are many and varied and comprise those taking education loans, working capital loans and medical loans. DLAI members focus on lending the micro-SME and SME community. Over the last 5 years, the digital lending community has been instrumental in ensuring last-mile credit supply and driving progressive initiatives such as India Stack, to make India a digital-first economy. At this current time, digital lending is even more vital to the economy and offers a safe way to continue credit supply to customers, during this period of social distancing.

A complete lockdown situation has also forced consumers to move to online channels which has resulted in increased adoption of digital lending products, a trend that is expected to accelerate over the coming months as customers will prefer self-serve products they can access at home, over going into a bank or meeting an agent. In addition, many banks (and other traditional lenders) are now looking to partner with digital lenders to increase their digital footprint in future.

India is truly a digital-first economy, and technology can speed up the development of industries and markets with phenomenal success. It can also allow for the rapid growth of unscrupulous practices that can fall between regulatory grey areas. With recent strong growth in the digital lending industry in India, there is a need for industry participants to maintain a strong code of conduct in order to prevent the rise of unscrupulous practices that could cause harm to the industry by reducing the confidence of customers, regulators and other market participants.

The new Code of Conduct includes a number of new provisions, such as those that ensure transparency in pricing and a focus on late payment fees (which some unscrupulous lenders have been known to take to excess). It also provides clear guidance on fair and responsive collections practices such as not calling or threatening to call any family member of the borrower. Implementation of the new Code will be implemented with a strict process for compliance including active focus on training of the employees in the organisations.

With the fresh code of conduct being implemented for all its members, DLAI aims to set a precedent for the entire digital lending industry so that no company can engage in unethical practices.

About Digital Lending Association of India (DLAI)

DLAI is an association of 81 fintech entities, some of which are Systemically Important Non-Deposit taking NBFCs (SI-NBFCs). Our members have collectively disbursed more than Rs 200,000 crores in last five years to more than 50 million urban small borrowers across 1500+ cities / towns in India. Borrower profile of our member institutions vary from micro manufacturing units (textiles, food processing, industrials, engineering, chemicals, healthcare etc) to very small mom and pop stores (kirana stores, restaurants, hardware shops, scrap dealers etc). On the retail side, our members lend to employees of non-rated corporates as well as self-employed professionals for medical emergencies, education, marriage and travel. More than 50% of the borrowers serviced are new-to-credit and have been denied formal credit by traditional financial institutions.

MoneyTap Raises Rs 500 Cr in Funding led by Aquiline Technology, RTP Global

Consumer lending platform MoneyTap on Tuesday said it has raised Rs 500 crore in a funding round led by global funds like Aquiline Technology Growth and RTP Global.

The series-B funding round was a mix of equity and debt and saw participation from existing investors like Sequoia India, Prime Venture Partners and MegaDelta, MoneyTap said in a release.

The funding will aid in creating a loan book of Rs 5,000 crore over the next 12-18 months, it said.

Debt capital was secured from players like Vivriti Capital, Credit Saison and others in the form of co-lending and credit lines. The company had previously raised a total of USD 12.3 million.

MoneyTap will use the funds to accelerate its growth trajectory, invest further in technology, data science, and launch its NBFC operations, it said.

The company further said there are plans to significantly expand its geographical footprint from 60 to 200 Indian cities, bringing its unique credit line value proposition to the masses.

"We will use this funding to scale our business, innovate with data-backed lending models and continue to hire aggressively. We will also use the funds to expand our credit offerings via our own NBFC," MoneyTap Co-founder Anuj Kacker said.

MoneyTap was commercially launched in September 2016 by Bala Parthasarathy, Anuj Kacker and Kunal Varma. PTI KPM

India among 5 Nations having Best Prospects for Online Micro Consumer Lending

According to the analysts of the financial holding Robocash Group who made a corporate ranking of countries in South and Southeast Asia, Laos, India, the Philippines, Myanmar and Vietnam have the highest prospects for the development of online micro consumer lending.

The highest score in the ranking (20) belongs to Laos. It combines a high potential of the untapped demand with a positive attitude to short-term online lending from the government and population. The need for relevant products in Laos is similar to the situation in Myanmar, but it is free from some obstacles of the latter. Over time, the new market will grow, and foreign investors may significantly contribute to this process. The underdevelopment of the legislation and the absence of financial institutes such as credit bureaus encourage experienced foreign companies with a fine-tuned scoring and reliable operation processes to support the efficient development of the market.

India holds second place with a score of 18. Despite a direct connection between the development level of a country and its place in the ranking, India is an exception. Although a significant part of local people already has access to credit products (79.9%), the rest include hundreds of millions of people. It correlates with the formed regulation. Besides, the market has a relatively small number of foreign companies, and not many Chinese startups have entered the market. As a result, the competition remains quite moderate.

Third place belongs to the Philippines (16). The country gives in the leading positions to other countries because of their hidden potential. However, other advantages compensate for it. The country has an established market of short-term lending services, flexible and facilitative regulation. Then, there is a balance between the high demand for relevant products and low debt load among the population. Moreover, the Philippine government is driving the digitization of financial services to decrease the factor of geographical fragmentation. It makes the country stand out on the regional background.

Myanmar is fourth in the ranking (14). As a country with a relatively large number of people below the poverty line and high demand for micro consumer loans, Myanmar stands out in comparison to the more developed countries in Southeast Asia. Still, some points are holding the market back. Partly, this is due to its underdevelopment. The government has introduced strong regulation to get rid off illegal creditors, which activities have led to debt overload of the population. The latter reduces the attractiveness of the country for foreign companies significantly.

Fifth place belongs to Vietnam (12). Vietnam demonstrates significant demand for micro consumer online loans. With a large number of people living in rural areas (66%), only one-third of the population has access to credit products. Another stimulating factor is the growing GDP forecasted to increase by 6.6% by 2020. Still, Vietnam should improve its regulation in terms of licensing of companies and control of financial statements. Overall, the country represents a bright example of the market with a medium position in the ranking. Vietnam is quite perspective but gives in the leadership due to the current difficulties for the business.



Methodology:
To rank the countries by their prospects for the development of micro consumer online lending, the estimate took into account the information about GDP, population and its access to financial services, regulation requirements and some other additional factors.

Almost 70% of Indian Online Borrowers Save Money for Family Plans - Report

A customer survey conducted by the international alternative lending holding Robocash Group in India has shown that 69.4% of its Indian customers are currently saving money for different purposes. Long-term plans stay in priority for 56.1% of respondents. Particularly, 42.7% save funds for a house, 7% save money to buy a vehicle and 6.4% do it to pay for education. These are the most common answers.

At the same time, most respondents claimed that online loans help to pay for daily needs (40.8%) including food, transport fare and other necessary expenses. Regular monthly bills for housing and utility services, rent, mobile and internet services, TV etc. follow with 18.5%.



Analysts of the company find that although these tendencies might seem mutually exclusive, they complement one another. Small online loans serve as an efficient tool designed to cover a short-term gap in a family budget. Most often, it helps to decrease troubles caused by the difference in salary dates and expenses schedule. At the same time, this tool doesn’t hurdle strategic financial planning. Saving money using a bank deposit or other tools means long-term money work. Taking those funds out of savings may cause much higher expenses than the cost of a small amount of debt.

The findings on the structure of monthly expenses among Indians prove it by the close correlation of the most frequent expenditures with the common purpose of short-term online loans. For 33.5% of respondents, housing, utility services and rent make the most of monthly expenses. Food takes second place with 14.6%. These payments cause short-term gaps in a personal budget most often. Another remarkable point listed as regular expenditures among Indians is the financial support to relatives (9.5%). It distinguishes India from other Asian countries and emphasizes the strength of family ties.

Then, it is noteworthy that 30.6% of the respondents do not save at all: 22.3% of them mention having insufficient income as the main obstacle for it.

P2P Lender Rupeecircle launches Affordable Credit Products for Rural Tamil Nadu

Digital lending marketplace RupeeCircle has set up a segment-wise model of credit disbursement through its P2P platform. Deserving Individuals and families belonging to certain communities who were hitherto declined loans from banks and NBFCs due to lack of sufficient credit history or lack of a proper bank account can now avail loans on the P2P platform.

By disbursing loans to individuals and families living in rural areas of Kulasekaram, Thiruvattur, Thipparappu and surrounding areas of Kanyakumari District, Tamil Nadu, RupeeCircle has commenced the process. The target community here are the daily wage earners working in Rubber Estates and cashew factories, and farmers.

Speaking on this new initiative Ajit Kumar, Founder and CEO, RupeeCircle, said “Our market research threw light on the fact that by reaching out to communities we stood a better chance of not only disbursing loans to credit worthy individuals but also subsume the concept of P2P lending and borrowing. And this is very important because people need to be aware that there are other (and better) alternatives to credit than banks and moneylenders."

“There are several communities in rural as well as urban India who are under-banked and fail to get their loans approved due to lack of sufficient credit history. In their need of the hour they turn to local moneylenders who levy exorbitant rate of interest”, said Nikhil Prabhakar, IIM (Ahmedabad) alumnus and Head of Marketing & Products at RupeeCircle. “Making credit accessible by leveraging Peer-to-Peer lending solutions will not only bring an individual under the ambit of the organised banking sector but gradually the benefits will percolate to the whole community."

RupeeCircle, licensed by RBI (NBFC-P2P), has disbursed more than INR 50 million over the last few months to under-banked individuals. Thousands of individuals have registered over the last few months and the default rate has been at a constant decline (currently at an impressive 0.89%), which not only signifies the trust of lenders but the robustness of its proprietary credit underwriting algorithm. This outreach to under-banked communities will fortify the efforts of financial inclusion in a country where unsecured credit is hard to get.

Piramal Group and Reliance Jio may together Launch Fintech & Lending Platform

Within a couple of a week after a report surfaced suggesting that Japan's SoftBank may lead investment of massive $1 billion in Mumbai-based Piramal Enterprises' financial services arm, an another recent report by Economic Times says that Reliance Jio and the Piramal Group may set up a joint venture (JV) for consumer lending and fintech.

It is to be noted that Reliance Jio is promoted by Mukesh Ambani while Piramal Group is owned by Ajay Piramal, who is Ambani's his in-law through his newly-wed daughter Isha Ambani.

The proposed JV, supported by Softbank Vision Fund, is at a very premature stage, but experts say the synergies are obvious.

According to the report, the Piramal Group is on the verge of closing a massive Rs 9600 crore funding from one more unknown investor besides Softbank. The capital infused is likely to be in two tranches.

Besides, Reliance Jio and Reliance Retail, the subsidiaries of Mukesh Ambani-led Reliance Industries, is also in process of launching a new e-commerce platform in India, which will initially be rolled for Gujarat retailers and store-owners.

In March, Reliance Industries Limited (RIL), through its subsidiary Reliance Industrial Investments & Holdings ('RIIHL'), has made three acquisitions of software solutions companies -- Reverie Language Technologies Pvt Ltd, Surajya Services Private Limited (‘Easygov’) and SankhyaSutra Labs Pvt Ltd, according to various media outlets.

Lending Platform Money Loji Launches Its App that Offers Loans to Salaried Professionals Within 5 Minutes

Money Loji, a modern money lending platform, has launched its App, which offers quickest and the most secure loans to salaried professionals for an immediate requirement with flexible repayment options starting from 7 days to a maximum of 90 days. They follow a unique three-step process - Application, Approval, Disbursement which is carried out within 3-4 minutes.

Say goodbye to the days of mustering the embarrassment of borrowing money from a relative or friend. Month-end or early-month days will no longer be crucial and testing, whether it’s a salary delay or an immediate medical expense, we finally have a solution. Money Loji, a modern money ending platform, has launched its App, which offers Quickest and the most secure loans to salaried professionals for an immediate requirement with flexible repayment options starting from 7 days to a maximum of 90 days. They follow a unique three-step process - Application, Approval, Disbursement which is carried out within 3-4 minutes. The eligibility criterion is a minimum in-hand salary of ₹20,000/month and a minimum age of 23 years. The application requires the users to upload an Identity Proof, an Address Proof, last 3 months Bank Statement alongside the salary slips.

For meeting unexpected medical expenses, purchasing a new gadget or appliance, planning a short trip or a short-term education course, monthly rents or advancing someone urgent funds, hospital bills, or EMIs on personal loans, housing loans, and insurance policies, Money Loji App is an ideal platform for salaried professionals.

It ensures security and reduces chances of data misuse backed by world-class security protocols to encrypt all your data, whether you need to borrow 10,000 or an instant short-term loan of 1,00,000 rupees.

The USP of the App is its flexible repayment process. You can pay in one EMI if the tenure of the loan is below 30 days, while you get an option to pay in three easy EMIs if your loan tenure is above 30 days and up to 90 days.

The latest technologies in AI for application and disbursement will ensure that the loan amount is credited to your account in just a few clicks, that too in the comfort of your home.

Commenting on the launch, Mr. Binit Kumar, CEO, Money Loji, said, “it's the most unique platform because of no manual interference and disbursement happening within 5 minutes. Being a registered NBFC it gives us an upper hand among various fintech lending platforms present in India as it not only provides us the flexibility in terms of product changes but also confidence among the consumers. Unsecured Personal loan business with customers having flexible credit scores has seen a growth of 33% as compared to last year. The payday loan market in India has been currently estimated at 80,000 cr and is only going up YOY basis. We will be coming out soon with similar lending platform for self-employed, business professionals and SME’s keeping the core USPs like algorithmic, machine intelligence, no manual interference and disbursement within 5 minutes intact.”
About Money Loji

MoneyLoJi.com is owned by Ganesh Leasfin Private Limited, an RBI registered non-bank financial company (NBFC) and are proud members of the Leading CREDIT BUREAUS in India, CIBIL, CRIF High Mark, Experian, Equifax.

[Published unedited via Business Wire India feed]

Microfinance Industry Witnessed Growth of 51% YoY in Q2 2018-19

The entire microfinance industry witnessed a growth of 51% YoY in Q2 FY2018-2019 with total Gross Loan Portfolio (GLP) standing at Rs 1,46,741 crore according to 27th edition of Micrometer report by Microfinance Institutions Network (MFIN)as on 30th September, 2018. Non-Banking Finance Company-Microfinance Institutions (NBFC-MFIs) have grown by 50% YoY in Q2 FY2018-2019 with GLP of Rs 54,018 crore as on 30th September 2018.

While the total number of active microfinance accounts for the overall industry were at 7.77 crore in Q2 FY2018-2019 with a growth of 27%, NBFC-MFIs witnessed a growth of 32.9% in active loan accounts with 3.43 crore accounts in the same period. The portfolio quality of the entire microfinance industry has also significantly improved during this period as depicted by PAR (Portfolio At Risk) >30 of 0.99% as on 30 September 2018. PAR>30 for NBFC-MFIs has also decreased from 2.87% as on September 2017 to 1.01% as on September 2018.

Speaking on the performance of the industry in the last quarter, Harsh Shrivastava, CEO, MFIN said, “We have seen a healthy improvement in the quality of the portfolio since last one year which is a very encouraging sign for the industry. The growth for overall industry including MBFC-MFIs has shown a good pace which we expect will be maintained in the coming quarters too. We continue to see robust investors’ confidence especially in the NBFC-MFIs segment which is due to sustained credit discipline in the sector.”

Taking into account data for only MFIN’s members, the 48 NBFC-MFIs disbursed Rs 21,001 crore of loans to 84 lakh accounts in Q2 FY2018-2019. In terms of regional distribution of portfolio (GLP), East and North East accounts for 36% of the total NBFC-MFI portfolio, South 26%, North 15%, West 15% and Central contributes 8%. Karnataka, Odisha, Bihar, Tamil Nadu and Maharashtra are the five top states in terms of GLP, accounting for 52% of total loan portfolio of NBFC-MFI segment. Looking at the geographic categorization, 70% of the portfolio for NBFC-MFIs is rural and 30% is urban.

In the microfinance universe, NBFC-MFIs’ share stands at 37% , Banks contribute 33%, Small Finance Banks have 17% share whereas NBFCs’ share is 12% and Non-profit MFIs account for 1%.

Microfinance Institutions Network (MFIN) is the premier industry association and Self-Regulatory Organisation (SRO) for the microfinance industry in India and its current membership/associates consists of 48 leading NBFC (Non-banking Financial Company) Microfinance Institutions (MFIs) in the country. MFIN seeks to work closely with regulators and other key stakeholders to achieve larger financial inclusions goals through microfinance.

Download the full PDF Report Here

MobiKwik Launches 'Boost' to Offer Instant Loan within 90 Seconds

MobiKwik, one of India’s largest digital financial services platforms, today announced the launch of its breakthrough product called ‘Boost’, that offers instant loan approval and disbursal to MobiKwik users. This is the first-of-its-kind of credit disbursal product, wherein loans of up to Rs. 60,000 are sanctioned as well as disbursed in a matter of 90 seconds. MobiKwik has partnered with a number of NBFCs to offer this service to its users. MobiKwik is the first wallet player to disburse loan amount in the user’s mobile wallet.

‘Boost’ offers loans without any hassles of submission of paperwork or collaterals. The loan sanction decision will be taken in 30 seconds, on the basis of an innovative risk scoring model called ‘Mobiscore’, developed by MobiKwik. The real time underwriting has been possible only because of artificial intelligence and data analytics capabilities used in the entire loan journey.

Users can apply for loans ranging from Rs. 5,000 up to Rs 60,000 through MobiKwik app. MobiKwik users who avail loans via the app will have the option to transfer their loan amount to their bank account. The amount credited can be utilized by the app users across a range of use cases including urgent purchases, marriage expenses, travel plans, hotel bookings, medical emergency, as well as payments to offline and online merchants.

The loan process includes 4 simple steps:

• Select Boost on the MobiKwik App


• Activate Boost for instant loan


• Insert PAN and other KYC details to view loan offer


• Accept loan offer and get instant disbursal

Speaking on the announcement, Ms Upasana Taku, Co-founder and Director, MobiKwik said, “Our objective is to provide easy access to credit to each and every Indian, irrespective of his location. This is first of its kind of product that will totally revolutionize the way India avails credit. Our path-breaking product will enable Indians, located anywhere in India, to avail instant loans, whenever they require, within 90 seconds, via the MobiKwik app. In the initial months of piloting the offering, we have already crossed a portfolio of 100 thousand loans. We will be rolling out new products in the lending portfolio so as to cater to diverse credit requirements of customers. We are confident that lending will be a game changer and will establish us as clear leaders in the digital financial services domain in the country.”

The loan amount is payable in easy instalments of 6 and 9 months. They can either payback from the MobiKwik app or can enable MobiKwik’s partner to auto-debit the monthly EMI from their bank account. MobiKwik users are required to update their KYC with PAN card and other KYC details to avail the loan benefit.
About MobiKwik

MobiKwik is India’s leading digital financial services platform, a mobile wallet major and a leading payment gateway. MobiKwik app is a leading mobile payment platform with a network of over 3 million direct merchants and over 107 million plus users. Founded in 2009 by Bipin Preet Singh and Upasana Taku, the company has raised four rounds of funding from Sequoia Capital, American Express, Tree Line Asia, MediaTek, GMO Payment Gateway, Cisco Investments Net1 and Bajaj Finance. The company has offices in New Delhi, Mumbai, Bangalore, Pune and Kolkata. It aspires to be the largest source of digital transactions in India and has a vision of enabling a billion Indians with one tap access to digital payments, loans, insurance and investments, by 2022.

MobiKwik believes in the ‘power of partnerships’ and has forged a string of smart partnerships with renowned brands such as BSNL, Bajaj Finserv Ltd and IndusInd Bank in the year 2017. In August 2017, BSNL went digital by launching a bespoke mobile wallet developed and issued by MobiKwik. Bajaj Finserv-MobiKwik have partnered to launch India’s first credit wallet, an EMI wallet through which customers can avail credits and loans. MobiKwik has also developed India’s first auto-load wallet for IndusInd Bank’s 10 million plus customers. The company has also signed a pact with IDFC bank for the launch of virtual cards.

Via ~ Business Wire India

[Top Image - economictimes.indiatimes.com [DHIRAJ SINGH/BLOOMBERG VIA GETTY IMAGES]

Tata Capital Launches Online Lending Platform for Corporate Borrowing

Tata Capital, the financial services arm of the Tata Group, launched an Online Working Capital Platform for its customers. The newly developed online platform under Tata Capital’s Commercial Finance line of business, aims to provide customers with an easy, seamless and paperless experience. As an industry first, loans up to INR 2 crores can be approved within 24 hours.

Tata Capital’s latest lending platform is one-of-its-kind in the industry which allows customers to access their loan account details, utilize the loan limits anywhere anytime. Customers can avail starting from INR 10 Lacs to as high as INR 2 crores. Tata Capital is today a leading player in the commercial business loan segment catering to a diverse set of customers across India.

Speaking on the launch of the online platform, Kusal Roy, Managing Director, Tata Capital Financial Services Limited, said “The Indian economy is growing at steady pace and we aim to fuel India’s growth story with our customer- centric financial solutions. Our new online working capital platform is designed to make commercial borrowing easier, convenient and super-fast. At Tata Capital, we are committed to empowering our customers through innovation and adding value to their businesses.”

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The online working capital lending platform is developed in partnership with Biz2Credit, a US based leading fintech company. Rohit Arora, Co-Founder and CEO, Biz2Credit, stated that “Our partnership with Tata Capital has expanded access to capital for millions of small and mid-sized entrepreneurs in India. Through Biz2Credit’s proprietary technology and Tata Capital’s resources, we are able to help SMEs quickly and easily secure the funding they need to grow.”

Tata Capital’s Commercial Finance Business provides financial solutions for Large, Medium, Small, Emerging Corporates and value based solutions to their ecosystems including Government & Public sector enterprises. The platform can be accessed from the Tata Capital website here.

Microlending Startup KrazyBee Raises $8 mn In Series A

Bengaluru-based online instalment store for young adults, KrazyBee, has raised a whopping $8 million (around Rs 51.7 crore) in its Series A funding round, according to a media report.

The firm, which is operated by Bengaluru-based Finovation Tech Solutions Pvt. Ltd, saw its latest funding round being led by Shunwei Capital and popular Chinese smartphone maker Xiaomi Technologies. The round, which was a mix of equity and debt, also witnessed the participation of RK Group and E-city Ventures, which is part of Essel Group.

Founded in 2015 by Wan Hong and Madhusudan E, KrazyBee has till date raised a total funding of $13 million. Last year, the firm raised a $2 million seed funding round from Chinese micro-lending platform for young adults, Fenqile, and venture capital firm, YeahMobi. It then raised a pre-Series A funding round of $3 million VC firm Plum Ventures and its existing investors.

Currently operating in Bengaluru, Hyderabad, Pune, Mysore, Vellore, Mumbai, Chennai, Coimbatore, Nagpur, Nashik and Manipal, the startup plans to use the capital raised to expand further to other cities, strengthen its risk model and algorithm, cater to new market segments and focus on product diversification.

Commenting on his company’s latest investment, Shirley Mao, investment director at Xiaomi Technologies, said, “The Indian demography has a large population of urban young adults that spends a lot online and offline. For such an enormous ecosystem, the need for urgent personal finance for purchase requirements is underserved. A focus on tech-based credit evaluation and compliant sourcing of funds can help capture and penetrate this market.”

KrazyBee’s mission is to be the convenient connecting bridge between the college-going youth of this country, and their wonderful dreams and aspirations. Its prime focus is to be the source of hassle-free financing for college students to pursue their passion, who are certainly creditworthy but don’t have any convenient options in the market to support them currently.

KrazyBee offers flexible installment-based purchases to young professionals and college students with no credit history or credit cards. It allows e-commerce purchase, cash credit, two-wheeler credit, college semester/tuition fee credit, among others.

(Image: YourStory)

FinMomenta Launches Corporate HR Loans for Employees to Make Lending Money Easier

FinMomenta, a Digital lending platform has introduced another core loan segment on their platform called Corporate HR loans for employees to make borrowing money easier in times of emergency. This innovative step by the company will allow employees of the corporates to borrow money at preferential rates and ensure instant loan approval in less time. It eliminates the need for the employees of mid-sized corporates to take time off work, physically visit banks to apply for loans and also follow up for approval & then documentation. FinMomenta ties up with Corporates & provide a link within the Corporate’s intranet portal where the employees can simply log-in and apply for a loan. The rest is taken care by FinMomenta with features like digital borrowing screening, quick approval and direct disbursement of loan to the employee’s bank account. The repayment is done in equal EMIs. FinMomenta expects the corporates to deduct the EMI before disbursement of salary to the employee.

In a credit starved country like India, FinMomenta makes a real difference in the financial inclusion space and attracts both individuals and businesses in terms of being simple, quick and rates that appeal to both lenders and borrowers.

Speaking on this new initiative, Naveen Madgula, COO and Co-Founder said, “Digital lending is a paradigm shift for the entire financial industry. Over the years it has proved to be a streamlined lending process. We are honoured to be the first ones in the industry to introduce Corporate HR loans which has the potential for huge immediate growth in the digital lending space. This will be a big value addition to the corporates tying up with us. ”

With corporate HR loans, employees can avail any loan starting from INR 50,000 to INR 5, 00,000 with minimum interest rate of 11.50% to 25% per annum with 6 months to 3 years loan tenures. The loans are available for borrowers in 50 cities in India. Traditionally employees went through banks to get loans. This need was later fulfilled by NBFCs in addition to banks, besides money lenders in the unorganized sector. However, over the past few years, it has become increasingly difficult to avail a loan through banks. In today’s world, where everyone is hard pressed for time, people are finding it a real pain to take time from their routine and go after banks in case of any financial need. It is precisely this pain point that FinMomenta aims to address and make it a win-win situation for the borrower & the Corporate. From a corporate employee’s perspective it means convenience of getting a loan without having to chase banks and for the Corporate it is a significant employee friendly step thereby resulting in increased employee satisfaction and loyalty.

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