The occurrence of a medley of events last year paved the way for ‘Fintech’ or Financial Technology emerging as a part of the mainstream. Gaining popularity exponentially, especially, in the Indian entrepreneurial landscape, this sector is in hyper-growth phase. The P2P (Peer to Peer) lending vertical in the Fintech landscape has been interesting lenders at a tremendous level. With the repressed real estate market coupled with unpredictability and opaqueness prevailing over gold market and stock markets, people are increasingly diverting their attention to alternate sources of financial investment. On the other hand, depreciation of returns from bank deposits on account of demonetization has also led to P2P lending gaining prominence as a great opportunity for financial investment. Especially for SME sector that has been hit hard by demonetization, P2P lending could be a boon for providing them quick access to credit at a bargain. Moreover, reports reveal that nearly forty percent of borrowers use their loans to expand and run their business and this segment of borrowing is to grow considerably for the entire P2P sector. Lately, a consultation paper released by Reserve Bank of India on P2P lending space has suggested some very innovative guidelines that favor interest of every player indicating a very promising future for the sector.
With the proposition of ‘We let your money work harder’, LenDenClub has emerged as one of the fastest growing peer to peer (P2P) lending platforms in India, which grew more than 20 times in last 1 year. Taking traditional lending to the next generation, the firm offers a great platform that connects investors or lenders looking for high returns with creditworthy borrowers looking for short term personal loans. LenDenClub was founded in 2015 by Bhavin Patel, a veteran in lending business; and operates from its corporate office in Mumbai. In a chat with The CEO Magazine, Mr. Bhavin Patel, Co-Founder & Chief Executive Officer at LenDenClub speaks about the company portfolio and says, “LenDenClub connects lenders, looking for a healthy and structured return on investment, to creditworthy borrowers looking to fulfill their loan requirement. Our automated, simple to use, transparent and hassle free P2P lending platform ensures that the borrowing needs of salaried individuals are met quickly and efficiently. By connecting lenders and borrowers in the peer to peer lending space, we create a win-win situation for both lenders and borrowers.” Housing a team of twenty competent professionals, who hold a high degree of knowledge based expertise and are dedicated to deliver utmost value to their clients, LenDenClub has been able to obtain a leading position in this recently emerged and rapidly developing sector. Having kept a very proactive approach towards achieving growth, the firm has prosperously shaped a plush clientele that already envelops more than 6,800 Registered Borrowers and more than 2,500 Registered Lenders in such a short span of time.
As per the data published by the platform, borrowers avail these loan to fulfil various consumption based purposes. These loans are being funded by lenders located pan India. LenDenClub research report shows that lenders between the age group of 30 to 40 have invested nearly 40% of the total invested amount and have also earned more than 25% returns on their investment. It clearly depicts a trend that mid-age investors are aggressively looking for an alternate investment option to diversify their portfolios and increase their returns.
Functioning as a web based platform, LenDenClub acts as the right place that hooks up lenders and verified buyers offering a best-in-class services and innovative processes to ensure its client lenders a high value on Return on Investments that are exclusive of high risk disclaimer. Speaking about that, Mr. Bhavin Patel adds, “Our pre verification processes for borrowers, systematic background checks and sturdy recovery options hedge the inherent risk in lending as an investment instrument. Furthermore, to provide sufficient risk hedging and loss mitigation options, we are incorporating features which will allow lenders to lend money starting from Rs. 1,000.”
The services of the firm also come as a boon for borrowers as their loan requests take very less time (anywhere between a few minutes to 18 hours) to process post registration. Informing The CEO Magazine about benefits to borrowers, Mr. Bhavin Patel shares, “Our simple and efficient loan processing system makes sure that you do not have to invest your time in physically visiting our office or arrange for home visits. LenDenClub follows the best standards when it comes to protecting your personal information and ensures that it isn’t accessed without appropriate authorization. Through a large pool of lenders we guarantee funding of your short term loans. In case of a loan not getting funded, part of the registration fee is returned to the borrower.”
LenDenClub’s flawless and simplified procedures empower borrowers to procure loans effortlessly while enabling lenders to earn high ROIs; thus, creating a win-win situation for both borrowers and lenders.
ü Credit Algorithm based non-traditional underwriting
ü Loan approval within 18 hours
ü 25% Average Returns till date
ü Default less than 1%
ü Rigorous borrower verification
Within two years of inception, the firm has climbed a significant number of steps on the ladder of success. Having disbursed 1000 loans in last one year of operations, the firm has exhibited its potential in shaping the capabilities of this sector. The firm has recently obtained seed funding from Venture Catalyst. The seed funding is being utilized for further development of the platform into an integrated online lending process.
LenDenClub was established with the vision of connecting the loan deprived section of India that envelops millions of salaried individuals with idle capital available with individuals and institutions. These lenders are a large pool of middle and high income population constantly looking out for structured avenues of investments with fixed timely returns. Leveraging rapidly advancing technology for developing a more cost efficient platform, LenDenClub is following a clear roadmap towards leading P2P Lending space. Speaking about the future plans, Mr. Bhavin Patel shares, “Looking at current growth matrix, we want to disburse 10,000 loans in next 18-20 months. Currently, we are strengthening our technology platform and we want to build an AI (Artificial Intelligence) based assessment platform on top of the Aadhar database. It will be a mix of identity recognizer cum assessment platform for any kind of borrower. In the Indian context, we need a mix of these as a lot of users do not have clear identity across ID proofs and that is one of the biggest challenges for all financial institutions in India. Today our algorithm is able to identify even rented borrowers with 90% efficiency. However, this has been in limited geography of Mumbai and Pune. We are now planning to expand the same across other cities. By the end of this financial year, we want to make this platform compatible to institutional investors as well. Their need is different from individual lenders. This will enable us to scale up this business faster.”
“We are betting heavily on technology to know our customers efficiently and then serve them effectively!” – says, Bhavin Patel, Co-Founder & CEO of LenDenClub