With the '12% Club' App, BharatPe enters the peer-to-peer lending market.

 Bharatpe p2p lending, a merchant payments and financial services provider, is expanding its consumer offering by entering the peer-to-peer (P2P) lending space with the launch of its product.

Individual investors can use the '12% Club' app to invest and borrow at 12% interest.

BharatPe has partnered with LenDenClub and is currently onboarding Liquiloans for its consumer product. In 2019, the fintech launched P2P lending for its merchants with the same partners.

To keep delinquencies low, 12 club p2p investors on BharatPe's platform will lend to its merchants.

Because these merchants will be using BharatPe's payment infrastructure, the company will have an easier time underwriting these loans. Borrowing for the 12% Club will be fueled by a traditional non-banking finance company (NBFC) such as Hindon Mercantile, which will make consumer loans. Grover expects the average loan duration on the platform to be between three and twelve months. Individual investors have already invested $5 million in 12 club bharatpe, with $1 million in loan disbursements.

While referrals have provided the majority of the growth, the app now has close to 2500 daily downloads, according to the company. BharatPe p2p lending began offering peer-to-peer lending to employees earlier this year. BharatPe recently joined India's coveted unicorn club after raising $370 million in a primary and secondary mix as part of a Series E funding round led by new investor Tiger Global Management in New York.

 

Peer-to-peer lending: what exactly is it?

P2P lending is not an entirely new idea. In 2017, the Reserve Bank of India added this service to its jurisdiction of regulation.
Even though there were more than 21 loan companies operating at the time, the RBI's restrictions made sure that only reputable companies with strong business strategies persisted.
With 12 club peer-to-peer lending, users with extra cash lend to potential borrowers who have been selected by the service provider.
Thereafter, on a regular basis, either all at once or in equal monthly installments, the borrowers pay the lenders.
After the RBI's regulations were published in 2017, several of the segment's established players noticed a spike in fundraising.

How risky are they?

One of the most important dangers connected with this kind of lending is loan non-payment.
 Bharat P2P lending is an unsecured loan, therefore there is no promise from the borrower that they will pay it back if there is a default.

When compared to other debt products, the loan's high return on investment can also be attributed to the fact that it is unsecured.

What does "12% Club BharatPe" involve?

"Users of the 12% Club app have the option to invest their savings at any time by opting to lend money through P2P NBFC partners of BharatPe.
Also, customers can apply for collateral-free loans through the 12% Club for up to Rs. 10 lakh for a three-month period at their convenience.

Consumer loans won't have processing or pre-payment fees, according to BharatPe 12 club p2p. Loan eligibility will also be based on the consumer's credit score, Payback loyalty programme buying history, and payments done with the BharatPe QR, among other things.
Customers who make investments through the app are free to seek partial or full withdrawals of their assets at any moment.

Conclusion

 BharatPe P2P lending is an example of how fintech companies work to add fresh features so as to keep captive audiences within the ecosystem and enable them to earn and borrow at rates that are competitive with the market.