is an innovative startup in the financial space in India and is likely to be a game changer in the largely conservative, regulation driven financial products market in India. In a sector dominated by banks and large NBFCs, ’s disruptive capability is attracting interest in this sector which has seen little or no innovation since the advent of micro-finance.
is a marketplace for peer-to-peer loans and seeks to match people who need money with people who have surplus money. This way i-lend eliminates the middleman, in this case, banks or NBFCs who raise money at a cost and lend it at a higher price thereby making money on the arbitrage. This arbitrage or the spread that the banks and NBFCs charge can be passed on to borrowers in terms of lower interest rates and the lenders get a much better return on their investment by lending directly to borrowers than on conventional financial products like savings banks and FDs.
Although works as a marketplace, it provides several value added services to both the borrowers and lenders. For the borrowers, it verifies their credentials, calculates their disposable incomes and matches with their loan repayment capability, performs full KYC of the borrowers and helps them build a credit story for themselves on i-lend. For lenders, i-lend performs all the necessary due diligence on the borrowers. It gives them an analysis of the repayment the borrowers can safely make by calculating their income to expenditure ratio, performs physical residence and work place verification and subsequently facilitates full documentation and loan management for lenders which includes cheque deposit services, back-end MIS etc.
In India, majority of the people even in the urban space are not included financially. In other words they do not have access to credit or money at a moderate and reasonable interest rate. With banks and NBFCs becoming very careful on unsecured lending, the only option these people have is to approach moneylenders who charge anywhere between 36% to 55%, throwing these people into a potential debt trap. It is this segment that i-lend is targeting, the salaried and professionally employed who do not have access to credit at moderate rates. The market size for these loans is huge with banks alone disbursing personal loans over Rs.3 Lakh Crore last year.
The risks are the same as in any unsecured lending but i-lend advises its lenders to spread their money over multiple borrowers thereby mitigating their risks. i-lend also has a stringent verification process which exceeds that of most banks and NBFCs in addition to constant monitoring of the borrowers repayments. This helps in mitigating the risk and in the event of a default i-lend assists the lender in taking legal action for recovery of the said amount.
i-lend intends to unlock a portion of the surplus money of individuals and build a business from it which has the potential to disrupt the Indian financial sector. Founded by Shankar and Niti Gupta, i-lend has received one round of early stage funding from Angaros Group – A Singapore based company. i-lend has piloted this model in Hyderabad. i-lend is planning on a launch in other cities in the next couple of months.