"Bharat Pe's P2P Lending Model: A Game-Changer in the Financial World"

 

Introduction

 

BharatPe, a provider of merchant payments and financial services, has broadened its consumer offerings by launching  12 percent Club app, a P2P lending service. The app allows users to invest or borrow money at a fixed 12% interest rate. Liquiloans, in partnership with LenDenClub, is providing the product to BharatPe.

The firm previously introduced P2P loans for its merchants with the same partners in 2019, and its platform enables P2P investors to lend to merchants to reduce default rates. The Indian Central Bank extended regulatory oversight of P2P lending to include BharatPe in 2017, allowing only reputable companies with sound business plans to continue.

The 12Club P2P program enables individuals with excess funds to lend to selected borrowers, who then repay the lenders regularly in either a lump sum or equal monthly installments. Grover estimates that the expected loan term on the platform will be between 3-12 months.

The 12% Club of BharatPe P2P Lending has already witnessed monthly investments of $5 million by individual investors, and loan disbursals worth $1 million.

 

What are some risks?

 

Loan default is a major risk with BharatPe P2P lending since it is unsecured. The 12% Club P2P program enables customers to apply for loans of up to Rs. 10 lakh for a three-month period without the need for collateral. Loan eligibility is determined by several factors, including credit score, purchase history in the Payback loyalty program, and BharatPe QR payments.

In addition to loan eligibility factors, BharatPe also employs risk management strategies to minimize the risk of default, such as using proprietary algorithms to screen borrowers and providing insurance coverage for missed payments.

Furthermore, BharatPe's partnership with Liquiloans and LenDenClub allows for a smoother lending process, as they handle the loan disbursal and recovery process on behalf of BharatPe. This reduces the operational burden on BharatPe and ensures that the lending process is efficient and secure.

Overall, while loan default is a risk associated with any type of lending, BharatPe has implemented various measures to mitigate this risk and ensure a smooth lending process for both borrowers and lenders. The success of the 12 percent Club app  P2P program thus far is a testament to the effectiveness of these measures, as evidenced by the high monthly investment run rate and loan disbursals.

About BharatPe P2p Lending

 

The 12 percent Club app offered by BharatPe allows customers to invest their savings by lending money through one of its P2P NBFC partners, while also enabling them to request collateral-free loans up to Rs. 10 lakh for three months without any processing or prepayment fees.

To determine loan eligibility, the app considers several factors, including the customer's credit score, purchase history in the Payback loyalty program, and BharatPe QR payments. Additionally, users who invest in loans through the app can withdraw their funds either partially or completely without incurring any withdrawal fees.

As per Grover, the loans on the platform are expected to have an average term of three to twelve months. The 12% Club of BharatPe has seen individual investors contributing $5 million per month, with loan disbursals worth $1 million already granted.

Conclusion

BharatPe P2P lending and other fintech companies are developing unique products and services to entice their target audience and provide them with the chance to earn and borrow funds at competitive rates available in the market.