After the recession hit world drastically in 2008, most of the credit unions and a large number of banks tightened the lending procedure by redefining the requirements. The loans that crossed $1 million started being the center of attraction and therefore, a huge gap is formed between the small scale industries and the banks restricting them from having sustainable access to the loans. As fair as it seems, if these small scale organisations don’t have access to the investment, they will end up failing in the business which like many drops forming the ocean, leads to the deceleration of the economy. This is where you need alternative financing. A bunch of non-deposit stakes men taking responsibility to serve the small businesses.
How does Alternative Financing help?
- It offers loans to business that were rejected to be financed by the banks.
- It provides short term loans and small loans to small scale business looking for an investment.
- Online financing and incredible access.
One among such unequivocal online financing services is Rupaiya Exchange. Considering the needs of small scale business owners, Rupaiya Exchange has been found to effectively connect two set of stakeholders on a single platform with an inventive approach. People often look out for loans as an investment capital with limited credit background or no credit background, at all.
By launching a P2P lending podium that increases the financial inclusion, Rupaiya Exchange aims to cater the people for their potential needs. People that get unserved from the traditional financial institutions look out for alternative financing as a lifeline. At Rupaiya Exchange, borrowers are viewed in a perception that goes beyond the traditional gamut of financial numbers keeping non-traditional data including social behavior or profile checks including education, schooling upbringing etc in mind.
Rupaiya Exchange was launched in November 2015 and has been working as a Bootstrapped organisation ever since. Founded by Rohan Hazrati, an experienced finance professional who, in his last assignment, served as CFO and Head Legal of a multi-billion organization working across multiple geographies. Having also worked with EY India and Grant Thornton, in their advisory practices, he has advised multiple clients across various industries and geographies. The organisation is based in New Delhi and works with an inquisitive team of 8 members. When asked about the idea that leads to the startup, the founder explained, “Having worked across domains and geographies for more than a decade – there came a point when I stepped back and analyzed as to how I would like to lead the rest of my life – and the answer was SIMPLE!”.
The sole profession of Rupaiya Exchange is to be the first point of reference of Alternative Financing for borrowers and be treated as an Alternate Asset Class by the investors. A misconception has been running around that P2P lending is only for bad profile/ subprime borrowers. Rupaiya Exchange aims to prove it as the fallacy. If we look at the current state of affairs, in the Indian scenario, the financial institutions do not cover the individuals with limited credit history (what we call ‘thin file’ cases) or individuals with no credit history (the ‘no hit’ cases) – these individuals in case of loan requirement scout for the unorganized market for fulfilment of their requirements. The lenders in this market are highly unorganized and cost of borrowing can go up to 4-5% per month. Further, the certain set of loans is not entertained by the financial institutions, especially when it comes to cases of startup funding. While there are set of unserved borrowers; there are individuals with short/ long term excess cash and looking for investments at a higher rate of return. Traditional products give an effective rate of return of 5-7% (post tax) while in case of equities, the rate of return can reach up to 20-25%; however, the markets are highly volatile. In the case of peer-to-peer lending, there is a possibility of earning up to 30% rate of return and that too with a fixed monthly cash inflow.
Through an effective P2P mechanism, they would like all (good profile) individuals to be able to borrow efficiently and at lower costs.
When asked about what makes their services unique from others, the Founder revealed, “ Our uniqueness lies in serving ‘un’ served or ‘under-served’ population. With P2P lending advantages like High Rate of returns, fixed monthly cash flows, curated list of pre-verified borrowers, possibility of diversification among borrowers, exist which gives one a higher flexibility and returns on investments by lenders. While the above objectives are very much prevalent on any P2P platform, on Rupaiya Exchange, for example, you have the following other unique benefits of investing like Safety of Capital through Lender Protection Fund, No Registration Fees No Investment Fees, Flexibility in the amount to be invested, since the investment amount starts from as low as Rs. 1,000 – thereby giving flexibility in diversification and spreading of risks.
Like in any startup attracting talent was one of the important factors – more so getting the talent for a new concept like P2P lending was a challenge. Secondly, Rupaiya Exchange had to develop and evolve the entire system from scratch- today the entire process is online – from registration to funding and tracking of loans. The Revenue model works on listing fees from the borrowers which are a flat/ absolute fee based on the amount of loan.. As of now, Rupaiya Exchange has more than 300 registered users and facilitated loans worth approx. 30 Lacs. With commitments from lenders exceeding 1.5 Crore now, they are aiming to disburse this amount in the next 6 months to creditworthy borrowers.
If you are an individual working on collecting capital for your small business, you just have come to the right platform. Stop searching and get on the track with Rupaiya Exchange.
