i2ifunding, a Peer-to-Peer (P2P) Lending Platform for Borrowers and Investors
i2iFunding is an online Peer-to-Peer platform connecting verified borrowers looking for unsecured personal loans and investors looking for alternative investment opportunities for higher returns.
The entire process is transparent, quick and easy. Apart from providing end-to-end services, i2i diligently evaluates the credit risk of each of the loan projects and recommends an interest rate for that project.
This ensures that borrowers as well as the investors are not clueless and aware about the benchmark interest rate of a loan project. 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.
Starting Up
i2iFunding is the brain child of Vaibhav Pandey and Neha Aggarwal.
Vaibhav is an IIM Ahmadabad pass-out and has 10+ years of experience in growing business, setting up new processes and driving operational efficiencies. Neha, an XIM-Bhubaneswar Alumni, has worked from brand management in FMCG sector to product development in financial sector. Manisha, Cofounder,i2iFunding is a CA. She has also worked in the past with NGOs like CAT Protection and ADHD in the UK overseeing finance and treasury activities
Founded in October 2015, the Noida based startup claims to have more than 700 registration within 6 months of operation.Currently they have already closed funding of around 35 loans and have more than 120 investors with an investment commitment of over 80 Lakhs.
How i2iFunding Works
Post registration at the portal, a user can either become a borrower or an investor. Either way, the user needs to submit self-attested copies of required documents to complete KYC requirements. The application then goes through the portal’s proprietary Risk Evaluation Model. Using this Model, the team recommends an interest rate for each loan based on its credit risk.
A borrower can then post the loan at an interest rate higher than or equal to the i2i Recommended Interest Rate. Once interest rate has been decided, the same rate will also be applicable to the investors who have already made the commitment.
An investor can can commit to lend a single or multiple borrowers. A detailed risk analysis of the borrower will be available to the investor. Once commitment has been made, the investor will have access to further documents as uploaded by the borrower. Any time before deal closure, the investor and the borrower can interact and clear their doubts through i2i messaging system.
To mitigate investment risks, a loan is funded by multiple investors. All the investors for a particular loan will enjoy same interest rate to avoid any speculation and should lead to fair discovery of market based assessment of borrower’s risk profile.
Once a loan is closed by the Borrower, i2i conducts physical verification of the borrower along with matching the uploaded documents with hard copy / ID proof. In case of any discrepancy, the transaction will be cancelled along with severe penalty on the borrower which includes barring him / her for carrying out any new transaction at i2i.
How safe is this P2P Lending?
Apart from the secure lending process mentioned above, a few more pointers that makes I2iFunding stand out from their competitors
Investor Protection Reserve – Investor protection reserve has been created to provide guarantee on principal amount lent. Depending on the risk category of the loan, 40% to 60% of principal amount will be refunded by i2i to investors in case of any default. No other player is offering such a comfort to their investors.
One Loan one interest rate: All other platforms allow each investor to negotiate different interest rate with the borrower. We believe this is not scalable as negotiations inherently delay the process.
Proprietary credit score model used to screen the loans before posting them on our portal – i2i is the only platform which perform a through risk evaluation of the borrower and interest rate is proportionate to the risk involves, instead of simple negotiation between borrower and investors.
The Way Forward
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. It has been growing in leaps and bounds around the world, thanks to an increase in the internet penetration and tremendous acceptability of e-payments.
“In India also, we see P2P lending to follow the similar growth trend that has been witnessed by ecommerce industry. We currently have investors from all across the country; however, borrowers are mainly from Delhi NCR and Bangalore. We are looking to expand to all major cities of India in next couple of years”, quoted Vaibhav
Peer to Peer lending in India has been in occurrence from decades in offline mode and in informal manner. Therefore, participation on lending side was restricted to very few people having muscle power. This also resulted in increased cost of borrowing for borrowers.
He further added, “We at i2iFunding are trying to formalize activity and bring more retail investors to this platform by providing them with various services like background verification of borrowers, risk assessment, opportunity to diversify the risk by investing small proportion of different loan requests, borrowers and investors, legal formalities, tracking and monitoring of repayments”
Akash Boaz
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