Rupaiya Exchange, a P2P lending platform, was launched a year ago with the aim of facilitating the shared economy and lending in India.
Kumar, 32, was looking to buy a used two-wheeler. Although he had many options, he was short of Rs 20,000. So he resorted to the one thing he was sure he could get help with. He posted an article on social media. India, more recently, and the rest of the world are opening up to the idea of ââa shared economy and funds.
Overall, the economy and shared funds are a strong concept. This is something that Rohan Hazrati, 34, who was a partner as the CFO of a German company, noticed. He had seen people invest and borrow through peer-to-peer loans. It was his eureka moment, he realized that there was a need for a simpler and easier loan process in India. It was then that he thought of launching Rupaiya Exchange, a P2P (peer-to-peer) lending platform.
After returning to India, Rohan met with a group of advisors and identified the need to streamline the approval process and make loan disbursement quick and hassle-free.
Build the platform
Rohan discovered that most traditional banks and NBFC channels have a tedious loan application process, and in most cases the loan is rejected due to incomplete documents or political reasons. He says the industry standard approval rate is six percent and that there would even be a 30 percent slippage in applications between the time of origin and processing.
âWe wanted to create a platform that not only brings a streamlined process from the time of origin to approval and disbursement, but also helps consumers with fast and hassle-free processing. “
By working on social, financial, demographic and profiling through their online presence, the team built internal algorithms, which score each user or loan combination and help us identify whether the case can be approved or not.
Once the loan is approved and posted online, notifications are sent to the set of pre-approved lenders who can then bid for the loans. There is also a reverse auction mechanism, whereby the system automatically selects a lender who is bidding at a lower interest rate on the loan, thereby benefiting the borrower with a lower cost of funds.
The pie of P2P loans
RupaiyaExchange has also linked up with the credit bureaus to review the credit rating with them. âWe are still on a learning curve and incorporate many digital transactions into our process to eliminate manual interference in our processes while preserving risk and regulatory requirements,â says Rohan.
Over the past two years, the focus on lending space has grown rapidly. In the P2P lending space, there is the Faircent supported by Mohandas Pai, which is a considerably important player in the space, i2ifunding, and IndiaLends.
There are also several other lending platforms such as Matrix-backed Finomena, Rubic, ReadyTap, etc. Most of the new era fintech lending startups are exploring different ways of judging and deciding a borrower’s creditworthiness. The premise of most of these startups is that the traditional means and methods used by financial institutions do not make lending easy.
Define a differentiator
Speaking of the differentiators, Rohan says they have continuously worked on their product since its inception and seek to innovate and add value for stakeholders (both borrowers and lenders).
He also claims that they are the first platform in the country to offer a capital protection plan on selected loans.
On the borrower side, to ensure better financial inclusion, they claim to have developed micro-loans in Madhya Pradesh state and to have POC (proof of concept) successfully completed and disbursed the loan. They focus on financing micro-entrepreneurs as small as housewives who are looking for a loan to buy sewing machines to start their own business, traders, grocers, farmers for the purchase of livestock, early wholesalers, etc.
The team takes a percentage of the funded loan as a success fee. The team raised a round of $ 200,000 from a group of HNIs and professionals.
Through his network, the core team now includes Jude Dunn, who leads growth and strategic alliances. Jude has worked with several startups and previously worked with MobiKwik. Anjul Garg focuses on software development. He has experience in PHP development, networking and Android development.
Ravindra Kumar is the Director and Advisor and has over three decades of experience in banking and financial services. It is part of all strategic decision making for RupaiyaExchange
âApart from the above, we have a team of credit analysts and marketing managers who review day-to-day operations. In order to ensure the governance and strategic direction of the company as well, a board of directors has been formed – which has a diverse knowledge of the field, âsaid Rohan.
Over the past year, the team claim to have progressed an average of 65%. The platform saw a loan of over Rs 70 crore and a disbursement of Rs 9 crore.
The team plans to strengthen its technology team and use data science and deep machine learning to process loan applications. The idea is to reduce the time between loan requests and disbursement, thus improving the customer experience. In monetary terms, the objective for the next 12 months is to facilitate a disbursement of Rs 100 crore.
âLonger term, by keeping our focus on financial inclusions, our products will instantly finance you for your loan needs, which will include micro-finance for the electric bill and small amount transactions. We want to help the Indian economy by strengthening the borrower’s credit rating and optimizing repayments, âsays Rohan.