Peer- to-peer lending or P2P lending is fast gaining popularity. These lending platforms, also called as ‘social lending’ or ‘crowd lending’, are designed in a way that they are benificial to both lenders and borrowers and are driven by innovative, cutting-edge digital technology so that they can transact with ease, convenience, and peace of mind.
Observing the immense demand for hand loans in India and also noticing that traditional borrowing for relatively small sized loans is mostly informal and ridden with high transaction costs, significant collateral needs, and long lead times, Sanjay Darbha founded PeerLend.in in 2015 to bring together lenders and borrowers on a common, safe and secure platform. PeerLend’s P2P lending allows individual lenders to enjoy better returns than traditional lending schemes and also borrowers enjoy low interest rates.
Sanjay is a strategy and management expert and with a deep interest and vast experience working with financial institutions and leads business development strategy at PeerLend. “PeerLend came to being as an outcome of my many years of experience and learning in both the finance and technology worlds. It was born as a vision to power financial services with user-friendly and robust digital technology solutions that can simplify the world of lending and empower individuals to discover, connect, and transact with peers in an online financial market place.”, says Sanjay, the founder & CEO.
“There is a need to map the idle resources to the deficit so that there is optimum use of resources and this can aid in better financial inclusion in our country of over a billion people of which we have about 5% as urban working class. And I could not find anything more powerful than creating a financial marketplace for peer-to-peer lending to enable this mapping. My 5 years stint in Microfinance gave me a great opportunity to learn and explore the alternate financial services sector. I have been following Kiva (www.Kiva.org) since 2008 and I feel that Kiva has been the biggest influence for me to start PeerLend.” he adds.
PeerLend also offers business loans for micro and small enterprises. There are 2 types of loans –
a) Loans that are based on the Purchase Orders that the businesses have to honour. These loans usually have short lead times of less than 3 months. They need short term capital to do that and these loan sizes could go up to 25 lacs.
b) Working Capital Loans upto a maximum amount of 5 lacs.
Both these loans are called Peer-to-Business loans (a special category of P2P loans) since most of the MSEs are propreitory driven. The customer verification process and the on boarding process has a different process (and more detailed) compared to the Peer-to-Peer Personal loans.
What makes PeerLend.in different from other platforms?
1. A detailed borrower qualification process based on credit assessments and other parameters including KYC documents before on boarding borrowers.
2. An intuitive PeerLend application helps track the loan for both lenders and borrowers.
3. PeerLend has partnered with E-Mudhra to provide e-signing of loan documents by submitting their IDs.
4. PeerLend intends to partner with insurance companies to have the borrowers take an insurance policy to the extent of the loan. PeerLend will become the master policyholder and assist the lender to receive payments from the insurance company should there be any unfortunate incident with the borrower.
PeerLend wants to empower its customers by providing lending solutions that simplify bank debt complexities with great ease. In future, PeerLend plans to use platforms like UPI and exploit technology to the best extent in enabling its customers perform their financial transactions more efficiently and with ease.
According to the PeerLend team, most of their borrowers for P2P loans are mainly urban full-time employees and their salary slip is one of the critical factors that helps them with the credit assessment and determining their credit worthiness.
A lot of financial institutions, both for-profit and non-profit, focus more on the semi-urban and rural areas while there is a huge chunk of urban population that is poor and lacks affordable access to finance. PeerLend.in is on a mission to service the urban poor where the traditional lending system fails and believes that they will empower a very large segment of people called the ‘missing middle class’ where there is an immense demand of small-ticket-credit requirement.