Even as a final set of regulations is yet to be firmed up in the country’s burgeoning digital peer to peer (P2P) lending space, a Singapore-based fintech start-up FinMomenta has launched its operations to tap individuals and businesses that are considered ‘risky’ by the bigger NBFCs and banks.
In April last year, the RBI had issued a discussion paper to regulate the P2P segment as the borrowers and lenders on the platform connect with each other directly, thus posing a risk for the lenders. In a bid to protect lenders’ interests, the RBI had suggested a minimum capital requirement of ₹2 crore for online P2P companies and said that a leverage ratio may be prescribed so that the lenders can get their invested money back in case of any default. Started by an ex-banker Brahma Mahesh Khaderbad, FinMomenta has launched an online platform Tachyloans that targets both individuals and SMEs that are not tapped by the banks as they have poor or no credit score.
The company uses a proprietary credit scoring model enabled by Artificial Intelligence and Big Data to assess the creditworthiness of applicants. It also uses e-KYC and Aadhaar for verification of the borrowers that helps lenders to automatically invest in the recommended list of borrowers, according to Khaderbad.
“P2P lending service emerges as the next level of online lending in a credit-starved country like India. Individuals and businesses usually struggle to find loans and we have addressed this need by launching Tachyloans that offers both consumers and businesses significant advantages,” Khaderbad said, adding that the company is looking to close a round of $2 million funding by October.
Tachyloans also analyses the social media profiles of its borrowers and uses psychometric analysis to understand their creditworthiness.
Khaderbad told BusinessLine that FinMomenta will look at collaborating with banks and other financial institutions to ensure a straightforward process and faster disbursement of loans, including education loans, medical loans and wedding loans, besides personal loans.
The platform is currently open for all resident individuals looking for loans in 50 cities across India.
Lenders and borrowers can negotiate on the loan amount, interest rates and loan tenor through a two-way bidding process available on the dashboard, he added.
Peer-to-peer (P2P) lending are collateral-free. Borrowers are charged anything from 12 to 25 per cent per annum, which is way higher than the traditional banking route.
While P2P lending is emerging as a faster and convenient source for securing loans globally, India is at a very nascent stage with players like Faircent, Monexo and Lendbox targeting the market that is expected to touch $2.4 billion by 2020.