BENGALURU : Merchant payments and financial services provider BharatPe is stepping up its game with consumers, entering the peer-to-peer (P2P) lending space with the launch of its product – 12% Club.
BharatPe’s P2P offer will allow individual investors to invest and borrow at 12% interest via the “12% Club” application. For the consumer product, BharatPe has partnered with LenDenClub and is in the process of integrating Liquiloans.
With the same partners, fintech launched the P2P loan for its merchants in 2019.
Earlier this month, fintech startup Cred also made a foray into the P2P lending space with the launch of its “Cred Mint” product for its members. Cred’s P2P product allows its members to earn up to 9% interest by lending to other members and borrow 12% to 16% through the offer.
However, BharatPe’s solution is a little different. P2P investors on BharatPe’s platform will lend to its traders as they want to ensure low default rates.
Since these merchants take advantage of BharatPe’s payment infrastructure, the company will be able to better take out these loans, based on the company’s cash flow, and help repay this credit by deducting even a small amount. part of daily payments, the company said.
Borrowing on the “12% Club” will be funded by a standard non-bank finance company (NBFC) such as Hindon Mercantile to provide loans to consumers.
“We had a smooth product launch earlier this month and are thinking of the ‘12% Club ‘as a good alternative to park additional cash, without taking on the high equity risks. In addition, it allows investors to withdraw from the offering at any time. Since BharatPe has millions of traders, there is no concentration risk in lending to a small cohort, ”said Ashneer Grover, co-founder and CEO of BharatPe, when interacting with mint.
According to Grover, the average duration of loans on the platform should be between three and 12 months. BharatPe’s “12% club” is already experiencing a monthly investment rate of $ 5 million by individual investors and loan disbursements worth $ 1 million, Grover added.
While most of the growth has been through referrals, the app sees nearly 2,500 downloads daily, according to the company. BharatPe first launched its P2P employee loan offering earlier this year.
The rollout of P2P loans by Cred and BharatPe marks fintechs trying to deploy new features to keep an audience captive within the ecosystem, allowing them to earn and borrow at competitive market rates.
“Large fintechs, including Cred and BharatPe, already have access to cash-rich customers and merchants, which translates into low customer acquisition costs. As a result, P2P loan offerings are becoming common for large fintechs, ”said Grover.
BharatPe is also planning to launch its PostPe ‘Buy Now, Pay Later’ (BNPL) product in the coming month. It will be the third major consumer product of the company, historically oriented towards traders.
Earlier in June, the company announced its foray into the consumer space with the acquisition of the multi-brand loyalty platform, PAYBACK India. From now on, BharatPe seeks to consolidate all its general public offers under a single application,
“With just one product, customers will be able to save and withdraw money while converting their purchases to EMI,” said Grover.
BharatPe, recently entered India’s coveted Unicorn League at a valuation of $ 2.85 billion, after raising $ 370 million in a primary and secondary mix, as part of a funding round of Series E led by new New York investor Tiger Global Management.
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