In the time of the pandemic, online social financing is gaining momentum. According to the CMIE’s 2020 Consumer Pyramid Household Survey (CPHS), 77% of urban Indian households contact family, friends and acquaintances when needed. There has been a 100% increase over the past year (2019-2020) in the number of urban households borrowing from family and friends. SaveIN, an online platform, is trying to capitalize on this by reaching out to Indians who lend and borrow money from each other.
SaveIN aims to help organize the large marketplace of transactions among friends, family and acquaintances making it easier to find, match and keep records of these transactions. In an email interaction with FE Online, Jitin Bhasin, Founder and CEO of SAVEIN, further explains this platform and the benefits it offers to lenders and borrowers. Excerpts:
What is the need for an online platform like SaveIN to borrow money from friends and family when it can be done directly through online banking, UPI?
Jitin Bhasin: Almost 80% of the Indian workforce is deprived of access to formal / institutional credit and therefore lending / borrowing between friends, family, traders, business partners, office colleagues, etc. is becoming an essential form of financing for most Indians. While these transactions are done through cash / bank transfers / UPI, there are associated challenges such as:
– Limited number of contacts to lend / borrow: people are not aware of the potential of their social network and end up lending / borrowing money to a very small number of people. SaveIN enables people to discover hundreds of lenders / borrowers by leveraging the power of their own social network.
– Ability to charge interest: Lenders find it difficult / embarrassing to “ask” for interest while lending money to borrowers around them. Likewise, borrowers are unaware of the fair / transparent interest terms they should pay to borrow with dignity. SaveIN, allows lenders to clearly define their desired interest rate while creating their loan profiles. This in turn is clearly displayed to borrowers, while approaching lenders for loans through the SaveIN platform, thus addressing this central issue for both parties.
– Record keeping: if transactions are made in cash, there is no associated record. Even in bank transfers / UPI, the transaction is recorded as a simple “payment” and not as a “loan” from person A to B. Therefore, there is no possibility to define the terms of “loan”. »/ Charge interest, calculate repayment amount, loan repayment schedule, etc. Lack of records leads lenders / borrowers to forget to pay / collect the money on the due date and hence increases the friction in their relationship.
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SaveIN keeps all records completely digital, thus recording everything from the loan application, the lender’s decision, the loan issuance, the repayment schedule and associated repayment records until the loan is closed. It is to be noted that all payments through the SaveIN platform are digital in nature, thus avoiding the need to use cash.
– Repayment issues: It is observed that lenders have to “hunt” borrowers for repayment since there is no official document / method to facilitate repayment. Given the absence of registration of these informal transactions, there is no penalty for the borrower in the event of default.
SaveIN sends automatic notifications and reminders to lenders and borrowers, reminding them of due repayments, thus enabling disciplined and responsible lending / borrowing through the use of the SaveIN platform. Lenders and borrowers can also assign ratings to each other, allowing both parties to record their experience. This rating of a lender / borrower is extremely useful in identifying disciplined and compliant lenders / borrowers on the SaveIN platform.
As it is evident, SaveIN is digitizing this vast informal lending market and solving the main problems faced by lenders / borrowers when dealing with each other.
SaveIN is neither a bank nor an NBFC regulated by RBI. How does this platform respond to the security concerns of lenders and borrowers?
Jitin Bhasin: SaveIN is a fintech platform that has created a proprietary technology product that facilitates discovery, matchmaking, record keeping and informal loan payments among willing participants in a social circle. All payments are made by users through the use of their existing bank accounts, through UPI where the control and responsibility for approving any payment / money transfer rests solely with the user. SaveIN cannot carry out any transaction without the express consent of the user. It should be noted that SaveIN has partnered with the main payment gateways and therefore offers a payment experience comparable to any other fintech / e-commerce / consumer company when it comes to payments / money transfer. SaveIN follows a fully secure and consent-based architecture; all customer information is encrypted using the advanced 256-bit encryption standard.
It is therefore evident that SaveIN complies with the highest level of security while allowing customers to use the platform.
What fees does SaveIN deduct when someone lends or borrows money on the SavIn platform?
Jitin Bhasin: As a platform, SaveIN reserves the right to charge its users for usage / convenience fees. However, at present, SaveIN does not charge users any fees for using the platform, thus allowing more and more Indians to start using the platform for informal loan transactions.
How much business have you done?
Jitin Bhasin: The SaveIN app was launched in mid-April 2021 and has since been downloaded by more than 50,000 users on the Google Playstore. We have over 3000 registered lenders on the platform and several users are already transacting on SaveIN for their informal loans. The platform has been rated by nearly 700 people on Google Playstore with a Lifetime Rating of 4+, reflecting that users appreciate the overall SaveIN experience.
Can I earn money by lending on the SaveIN platform? Who can borrow money from me on SaveIn?
Jitin Bhasin: Yes, a lender can set a prime interest rate (0% to 36% per annum) while lending money to people in their own network. For a loan to be registered on the platform, the loan terms must be agreed between a lender / borrower. SaveIN connects lenders and borrowers in their own social networks, which means that a lender will never receive requests from unknown people.