Hyderabad: With the Reserve Bank of India guidelines on peer-to-peer lending firms likely to be released in a few weeks, city-based companies are getting ready to increase their registered lenders. They are optimistic that demand for loans will rise significantly as the haze surrounding the lending platforms will be cleared.
For instance, city-based i-lend says there is loan demand of about Rs 500 crore in one year while another firm Oxyloans says there could be a demand for Rs 600 crore in the same time.
In P2P lending, the technology provider offers an aggregation platform for both borrowers and lenders. Credentials of both are verified by the platform. It charges both the lenders and borrowers for every transaction. P2P lending, in which the loan disbursal, repayment and recovery happens only online, comes to the rescue of those looking for small loans without the associated hassles. Financial institutions, on the other hand, prefer bigger transactions due to cost and resource reasons.
“More people will be willing to lend as well as borrow on P2P platforms,” said Shankar Vaddadi, founder and director of city-based i-Lend, explaining the features of the new guidelines. It currently has disbursed over Rs 5 crore in about 270 loans through its platform. It has over 4,500 lenders registered and about 20,000 borrowers. It also has four institutional lenders.
Another player, Oxyloans, has 1,300 users including 264 lenders and 1,000 plus borrowers. “We see a loan demand of Rs 600 crore and are hoping to achieve Rs 200 crore in six months or so,” said Radhakrishna Thatavarti, founder and chief executive officer of SRS Fintech Labs, which operates Oxyloans.
Its focus too will be on increasing the lender base, he said. According to Shankar, most of the loans are taken for debt consolidation and buying an automobile. Medical, education, relocation are the other reasons why people take a small loan. “The default ratio is small. Since, post-dated cheques are given, most borrowers tend to pay up,” he said adding that bulks of the loans are taken by the salaried class.
The new guidelines will ensure that multiple lending is curtailed. “Right now, there is no data sharing. As a result, there is a possibility of few persons taking loans from multiple players. But that will end soon,” said Shankar. The company has no plans to get into asset-backed loans.