5paisa.com launches peer-to-peer lending platform

The country's only listed fintech firm 5paisa.com on Thursday said it has launched peer-to-peer lending platform, where one can lend from Rs 500 Rs 50 lakhs to multiple borrowers and earn interest as high as 36 per cent per annum.

Lending on the platform -- 5paisa Loans -- is completely paperless, diversified, less risky, transparent, and digital, the company said in a statement.

The platform is a registered NBFC with the Reserve Bank of India, which offers peer-to-peer lending solution with an aim to solve short-term cash requirements of borrowers from all walks of life, while giving an opportunity to lenders to earn on their idle money.

"We are glad to launch 5paisa Loans at a time when borrowers like small businessmen, individuals don't have many avenues to borrow and many lenders have no opportunity to lend. 5paisa Loans is a platform, where we are bringing the old ways of lending and borrowing in latest avatar.

"We expect our platform will in small-way help to meet consenting borrowers and lenders to fulfil each other's needs during the unfortunate Covid19 outbreak," the company's CEO Prakarsh Gagdani said.

5paisa Loans screen every borrower coming on its platform with more than 100 variable data points like age, location, earnings, previous loan history, social profile, expenditure, among others and present the information through a unified score for lenders to choose from.

Therefore, rather than lending to an individual borrower, the platform enables lending to a portfolio of borrowers, thereby, reducing risk and diversifying investment.

With this a lender can lend money to multiple borrowers with different scores and earn fixed monthly returns, the company said.

Peer-to-peer lending was mostly unorganised where some businessmen used to lend money to other businessmen for short term requirements.

The entire transaction was outside the regulatory framework and credibility of borrower was evaluated mostly on personal relationships.

Besides, the transaction value and the risk, both were high and therefore mostly out of reach of the retail investors.

The company is a diversified online platform for financial products serving about 5.5 lakh customers. Apart for peer-to-peer lending, it offers equity, debt, gold, etc on its platform.