20 March 2018

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Peer to Peer lending platform: i2i Funding

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Interview Mr. Raghavendra Pratap Singh – Co-Founder of i2i Funding, India’s second largest Peer-2-Peer Platform connecting borrows with the investors based in Noida. Leading the product development and marketing team, Mr. Raghavendra has been instrumental in streamlining and executing the progression strategy of the firm.

With many milestones to its credit, i2i funding is ready to scale new height of growth and expansion in coming years. Here is the candid interview of Mr. Raghavendra Pratap Singh where he talked about his future plans, growth strategy and the future of i2i funding with Mamta Sharma of Small Enterprise Magazine!


SE. Give us some background information about i2ifunding? What is the business model of the company?

I2i: i2ifunding is a leading peer to peer lending platform in India which has grown rapidly since its inception in Oct 2015. It has five co-founders (Raghavendra Pratap Singh, Vaibhav Kumar Pandey, Neha Aggarwal, Manisha Bansal and Abhinav Johary), with diverse but complementary skills. We, at i2i Funding, started working on the said concept in late 2014 and launched the first version of this platform in Oct 2015.

i2ifunding connects verified borrowers seeking unsecured loans from investors spread across India who are willing to fund them. i2i provides an attractive investment option to investors and affordable personal loans to genuine borrowers.

i2ifunding offers full-fledged technology driven Peer to Peer lending platform which can manage end to end loan cycle seamlessly. It provides assistance to qualified borrowers to get funds without the constraints of traditional banking system.

SE. How did you start this P2P platform? What was the purpose of establishing this company?

I2i: We were always looking for an idea which creates value and benefits a large population. We came across a situation during our corporate stint, where we saw one of our colleagues borrowed money from money lenders at a monthly interest rate of 4%, to meet some urgent financial requirement, because his personal loan request was rejected by Bank. This case left us thinking about creating something which can help people meet their financial requirement at genuine interest rate without really squeezing them. This is how we started working on the concept of i2ifunding.

The need to provide an additional option to people to meet their financial requirement at genuine interest rate was the reason for us to come up with such a unique platform.

SE. How many investors and borrowers are associated with i2ifunding to date?

I2i: Currently we have more than 40000 registrations on our website. We have around 3000 investors, from which around 1000 are regular ones. We have disbursed around 500 loans to date.

SE.  What is the amount of loan disbursed?

i2i: We have disbursed around Rs. 8 Cr.

SE. How can an investor earn from his investment and at what rate of interest? Can you explain it with an example?

i2i: An investor can lend money to verified and approved borrowers listed on our website. All the details about borrowers are available to investors like loan amount, interest rate, tenure, risk category etc. Apart from loan details, detailed profile of borrower is also visible to investors.

An investor can lend as low as Rs. 5,000 to any borrower. Interest rates depend on the risk profile of borrower and it is ascertained by i2i. An investor can earn from 12% to 30%; depending on their risk appetite. On average investors are earning 18-20% of returns through our platform. Investors get repayment every month in the form of EMI. They have the option to reinvest EMI into new loans to increase their returns.

Small example of returns given in below table:

Investors start getting their principal amount back as well from the first month. Our advice to the investors for maximizing returns is that they should reinvest the money coming back every month to create a large corpus.

SE. What is your role in this platform of lenders and buyers? How do you make profits?

i2i: i2i is much more than just a profitable lenders’ and buyers’ marketplace. In addition to seamlessly coordinating the complete process of loan listing, funding to loan repayment, it plays an important role in coordinating with investors, screening and credit risk assessment of the loans, verification, documentation and loan monitoring. Each of these links is important and is diligently and carefully put together by i2i to complete the process successfully.

i2i has an in-house credit evaluation team which does the credit analysis of each of the borrowers. i2i has also developed a proprietary Credit Score Model which incorporates more than 50 parameters. Based on the detailed analysis, the credit team assigns a risk category (i2i Risk Category) and Interest Rate along with a detailed report for each of the loans.

I2i charges 1% of investment amount from investors and 4-6% of loan amount as processing fee from borrowers.

SE. Will the RBI’s new guidelines impact your P2P lending platform?

i2i: As mentioned in the guidelines, existing P2P lending players are permitted to continue the business of a Peer to Peer Lending Platform till their application for issuance of CoR is rejected. There will not be any major impact on day to day business of i2i. We are modifying our processes to ensure we are compliant with latest guidelines such as a cap of Rs. 50,000 investment to a single borrower by a lender etc. We have already engaged a reputed consulting firm for our CoR application process and we are fully confident of getting NBFC-P2P License.

SE. What is your objective and goal for 2018 in terms of expanding your business?

i2i: We currently have investors from all across the country; however, borrowers are mainly from few metros. We are looking to expand to all major cities of India in next couple of years.

We are investing heavily in technology and will be a technology-driven platform which will help investors and borrowers transact easily. We are actively tying up with affiliates, financial advisors and trying to create a network to bring customers from the offline market as well, which is a huge marketplace with a lot of potentials.

We would also like to add more resources to our existing team especially in sales to meet expansion target. We are planning to open one office in South India, most probably in Bangalore or Hyderabad as we have a lot of customers coming from that region.

In next couple of years, we would like to disburse at least 15-20 Cr rupees every month with an overall loan book of more than 200 Cr.

SE. Do you think there should be more such P2P lending platforms?

i2i: We already have more than 20 platforms in India but if you compare this number with China, it is minuscule. China has more than 2000 P2P lending players. India is a credit-starved nation and only 4-5% people can get loans easily from existing financial institutions. So there is definitely scope for more P2P players. However, this sector is still in nascent stage in India and needs to be managed carefully. RBI overseeing the sector would put an end to all uncertainties associated with the unregulated lending business. The change in the “perspective” of borrowers and lenders to look upon P2P Platforms would be awe-inspiring for many new entrants who would flock their ways to this sunrise industry now.

SE. Are you satisfied with the growth and the financial assistance that your company can offer through P2P lending?

i2i: After working incessantly to strengthen our risk processes and understanding the market better, i2iFunding is gearing up for a leapfrog jump now. So far we have been disbursing around Rs. 60-75 lakhs worth loans monthly, but we have set a realistic target of achieving 20-25 times growth over next two financial years.

To date, we have facilitated loans to around 500 borrowers who could not get credit from existing financial institutions. We have assisted people to get a loan for medical treatment, for marriage, for house renovation etc. We feel blessed when we are able to help such borrowers. We want to do more and we believe that as a pioneer of this industry in India, we are in the sweet spot to take leapfrogged jump.

SE. What are the marketing and business strategies implemented to expand your business and outreach to a wider segment of people?

i2i:  Most of our marketing efforts are digital as it is more suitable for our business model. We are continuously evolving our methods to gain maximum ROI through digital marketing. We are running targeted Facebook and AdWords campaigns to attract relevant customers. As a brand building exercise, from time to time, we do PR activities as well in the mainstream as well as vernacular media. We have put a lot of emphasis on increasing organic traffic to our website and we are continuously working on our SEO strategies to improve our organic rankings for relevant keywords.

We are partnering with traditional NBFCs to ensure that borrowers get faster and greater access to credit.  We are also coming up with new products to cater to different requirements of customers. We have done an extensive market study to understand where the current product portfolios of banks, NBFCs, and P2P platforms fall short. Based on our findings we are working on new products. They will be unique and will address the borrowers’ demand.

The use of technology improves efficiency and brings the cost per transaction drastically down in the long run. This is a reason why we have continuously been investing in technology. Besides, upgrading the experience of present interface, we have planned to launch one mobile app each for investors and the borrowers.

These technological upgradations will also facilitate better customer experience due to improved navigation. Moreover, investors will be well-equipped with more efficient analytical tools and in-depth reports.

This multi-prong strategy is likely to help i2iFunding attain exceptional growth in coming years making it one of the most credible P2P Platforms.

SE. Where do you find yourself 5 years down the line and how do you plan to reach that goal?

We are looking to become a credible alternative financing option for people across India. By then, we are planning to be operational in at least 100 smart cities of new India, providing easy credit facility to genuine borrowers. We will also be giving loans to Micro and small enterprises who find it very difficult to get credit from existing financial institutions. Our aim is to ensure anyone looking for an unsecured loan comes to our platform at least once and try our services.

We are targeting to disburse Rs. 100 Crs of the loan every month in five years down the line across India.

To achieve our growth plans, we are planning to raise equity funds in the tune of 25-30 Crs from institutional investors/Venture Capitalists at various stages during next 3 years. These funds will be utilized in enhancing our platform/apps and brand building activities.

SE. Would you like to send any message to the lenders and borrowers who are looking out for such platforms?

In the recent past, several P2P lending platforms have appeared, it’s advisable that lenders spend some time selecting the right P2P Lending platform. While a few Peer-to-Peer Lending platforms are serious, a number of questionable players have also entered the market to make easy money. Furthermore, after 3 months only P2P lending platforms who have taken/applied for the Certificate of Registration (CoR) are allowed to operate. Hence, lenders need to be extra careful while choosing P2P Lending sites.

Borrowers should be extra vigilant while applying for a loan on a P2P lending platform. They should check and verify the interest rates being offered to them along with fees which they have to pay. Many platforms charge very high-interest rates and try to manipulate it by showing fixed interest rate loan.




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