"In Next Couple of Years, Our Aim is to Disburse At Least 20-30 Cr Every Month" - Raghavendra Pratap Singh, Co-Founder, i2iFunding
Apart from providing end to end loan servicing, i2i diligently evaluates the credit risk of each of the loan projects, post which it assigns risk category and recommends an interest rate for that project (a borrower can borrow at an interest rate which is higher than or equal to this rate).
Apart from providing end to end loan servicing, i2i diligently evaluates the credit risk of each of the loan projects, post which it assigns risk category and recommends an interest rate for that project (a borrower can borrow at an interest rate which is higher than or equal to this rate). This helps the borrowers as well as the investors to have a benchmark interest rate. In the process, the investors get an opportunity to earn higher 'risk adjusted returns' while the borrowers get an opportunity to get funded at the lowest cost possible as per their risk profile and market based demand. We also provide legal and recovery support to investors in case of default by any borrower. On top of that i2i Funding also have, Principal Protection in place for investors to ensure we have our skin in the game.
Team BWDisrupt Interacts With Raghavendra Pratap Singh, Co-founder, i2iFunding and Spoke to Him
What was the idea behind the inception of the organisation?
We were always looking for an idea which really creates value and benefits a large population. We came across a situation during our corporate stint, where we saw one of our colleagues borrowed money from money lenders at a monthly interest rate of 4%, to meet some urgent financial requirement, because his personal loan request was rejected by Bank. This case left us thinking about creating something which can help people meet their financial requirement at genuine interest rate without really squeezing them. This is how we started working on the concept of i2iFunding.
List the USPs of the brand
i2iFunding is much more than P2P marketplace. Apart from providing end to end loan servicing, i2i diligently evaluates the credit risk of each of the loan projects, post which it assigns risk category and recommends an interest rate for that project (a borrower can borrow at an interest rate which is higher than or equal to this rate). This helps the borrowers as well as the investors to have a benchmark interest rate. In the process, the investors get an opportunity to earn higher 'risk adjusted returns' while the borrowers get an opportunity to get funded at the lowest cost possible as per their risk profile and market based demand. We also provide legal and recovery support to investors in case of default by any borrower along with Principal Protection to ensure downside is limited for investors in case of default.
We also take pride in providing best quality service to our customers. Our customers appreciated our prompt response and services being provided to them.
Principal Protection Fund – To mitigate biggest concerns of retail investor’s Principal protection fund has been created to provide guarantee on principal amount lent. Depending on the risk category of the loan, up to 100% of principal amount will be refunded by i2i to investors in case of any default. Investors need to pay an upfront fee which will be used to build this fund.
Proprietary Credit Score Model used to screen the loans - It takes into consideration 50+ parameters to analyze each loan ensuring that each loan has been properly evaluated before being listed.
‘One loan one interest rate - Each borrower is assigned a risk category and i2i Recommended Interest Rate commensurate to the credit profile. Users can rely on the platform for loan assessment as they may not have resources to do proper credit evaluation.
We raised Rs. 2 crore from individual angel investors in May 2016 and we are in discussion with various VC firms to raise $4-5 million in next few months.
There were multiple issues during setting up this business right from ensuring legality of business to hiring right resources. As there are no clear guidelines from RBI/SEBI on P2P lending sector, it was very difficult for us to assess, what we could do and what we cannot. Also, we wanted to be sure that whatever we are doing is legal in India. Once we were clear that what we are going to do, then came the challenge of hiring right resources and setting up the transaction and documentation process for both investors as well as borrowers. Last but not the least, was informing customers about this new concept and convincing them to register on our portal, especially convincing investors.
Market Size & Opportunity
While P2P lending is still at a nascent stage in India, it is one of the leading means of financing in countries such as the US, the UK, Germany, China etc. and many p2p players have grown to become Billion dollar companies. P2P Lending is now China’s third most popular choice of investment. The market has been growing multifold since its humble beginning in year 2010. Not only China, P2P Lending is big in the US, the UK, Germany and many more other countries and has been growing in leaps and bounds. The top two lenders in the US accounted for $18 billion of loans disbursed in 2015. In India also, I see P2P lending to follow the similar growth trend that has been witnessed by ecommerce industry.
P2P market size in India:
Following table is Based on a NSSO, Census of India report:
Target Income class
3.9 - 9.75 Lakhs
Urban Households in this income range
Average Debt per household
INR 1.25 Lakhs
Total Debt Market
INR 7.2 Lakh Crores
Share of Non-Institutional Debt
Non Institutional Debt
INR 1 Lakh Crores
Hence, on a very conservative estimate also, the near term Market potential is close to ~1 Lakh Crore.
This is untapped largely due to the following reasons:
Lack of Consumer Awareness: The sector has seen a steady and progressive growth in the past 6 months and is growing exponentially with every passing day. Many initiatives are being taken to make people understand it’s application as an important investment diversification tool but there is still a lot more to be done.
The sector is unregulated at this point of time. However, with the release of concept paper by RBI on proposed regulations, there has been more acceptance and receptivity towards the concept. We foresee, an exponential growth in the sector enabling a significant outreach and ease of credit access, once the regulations are announced.
We are going to come up with mobile app for investors to ease transaction being done by them. We will also come up with borrower’s app in next 6 months. We are upgrading our existing interface and processes, which will take user experience to next level, with lot of different kinds of reports and analytics available to customers.
We are also tying up with NBFCs to have greater access of credit to borrowers so that funds can be disbursed very fast.
We may come up with different debt products to meet different requirements of borrowers e.g. pay day loans, only interest payment loans etc.
We not only want to become one of the best P2P lending firm in India, but also want to become a credible financing option in India for both borrowers and Investors.
We currently have investors from all across the country; however, borrowers are mainly from few metros. We are looking to expand to all major cities of India in next couple of years.
We are investing very heavily in technology, and will be a technology driven platform which will help investors and borrowers transact very easily. We are actively typing up with affiliates, financial advisors and trying to create network to bring customers through offline market as well, which is huge with lot of potential.
We would also like to add more resources in our existing team especially in sales to meet expansion target. We are planning to open one office in South India, most probably in Bangalore or Hyderabad as we have lot of customers coming from that region.
In next couple of years, we would like to disburse at least 20-30 cr rupees every month.
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