The August Book Giveaway — Tell Us What You Think About “i-lend.in” and Stand a Chance to Win a Copy of the Book “The $100 Startup”

by Vinaya HS on August 8, 2012

in Finance

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Thought I’d give the August Book Giveaway an interesting twist.

The write-up below explains the rationale behind i-lend.in, a portal that facilitates P2P investments and borrowings. This write-up was provided to me by the team who own and run i-lend.in. I felt that you, as an astute reader of Capital Advisor, could share your thoughts, critique, or experiences on the concept of peer-to-peer lending and borrowing thereby helping i-lend.in to improve their service.

The best feedback/comment to this write-up wins a copy of the book “The $100 Startup: Fire Your Boss, Do What You Love And Work Better To Live More.”

Full Disclosure — I have no business or personal relationship with i-lend.in. This contest is sponsored by me and is only meant to gauge what you as a potential investor or borrower think of such a service.

That said, I’ll hand over this post to the i-Lend team…


P2P Investments/Borrowings — New Asset Class for Investors, Low Cost Personal Loans for Borrowers.

P2P means peer-to-peer. i-lend facilitates P2P investments and borrowings. i-lend’s portal combines traditional lending practices with social networking to create the platform where borrowers and investors transact. Borrowers benefit from lower rates and lenders get higher returns with optimized risk.

Borrower Process –

Key benefits to borrowers –

  • Lower rates of interest.

  • Flexible loan amounts. Banks impose lower limits on amounts of personal loans.

  • No pre payment penalties which lets the borrower close a loan quickly.

Borrowers can borrow from Rs 25,000 up to Rs 3,00,000 for tenures from 6-months to 36-months. Stringent verification of borrower is undertaken by i-lend. i-lend verifies the residence and office addresses, income proof, and bank statements. In addition, i-lend also checks the references that the borrower provides.

After the verification, the borrower is allowed to put up a loan request. The loan request allows the borrower to describe the purpose of the loan, his background, provide a reasoning as to why he is a worthy borrower. The borrower is encouraged to support the request with both images and videos. After completing the request, the borrower can browse the investor listings and approach the investors and request for a loan.

Similarly, the investors can also approach the borrowers. The investors can ask additional questions to the borrower.

Investor Process –

Key benefits to investors –

  • Higher returns when compared to fixed deposits etc.

  • Possibly lower risk compared to equity & equity-related instruments.

A similar but a lot simpler verification is undertaken of the investor by i-lend. Post this, the investor is allowed to list an investor profile and approach borrowers listed on the site. Investors can invest as low as Rs 5,000 and up to a maximum of Rs 3,00,000. The minimum rate of interest is 12%.

i-lend.in is owned by Dipamkara Web Ventures Pvt. Ltd. Dipamkara is founded by experienced technocrats with a combined experience of more than 40 years and is based out of Hyderabad. Investors and Borrowers can understand more about our process by reading our Frequently Asked Questions at http://www.i-lend.in/faq.html.

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The i-lend team was kind enough to provide an offline version of their FAQ. Click here to download the PDF-version of the i-lend.in FAQ.

Image of the book The $100 Startup
So, what’s your opinion about the i-lend P2P Service?

You’re welcome to share your thoughts, critique, or experiences on the concept of peer-to-peer lending and borrowing. The best feedback/comment to this write-up wins a copy of the book “The $100 Startup: Fire Your Boss, Do What You Love And Work Better To Live More”.

Remember, the more detailed and thoughtful your comment is the higher are your chances at winning this giveaway. And as always, don’t forget to type-in your email address with your entry.




Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 9 comments… read them below or add one }

Bhaskar August 8, 2012 at 7:20 PM

Went through the website and FAQs.
My thoughts in no particular order:

Pros:
-Interesting concept but lots of existing companies worldwide like Zopa, dont know about India.
-Bidding by investors – Nice.
-Investors can diversify their risks by lending small amounts to multiple people since it allows loans from more than one investor.
-Reputation of borrowers get build up over time.

Cons:
-Pretty high costs. Zopa charges 1% i think.
-Credit history checks done from CIBIL? Score made available to investors.
-What stops other NBFCs from starting such a scheme?
-Any costs to be paid by the investors when i-lend hires recovery agent?
-Are the complete details of the background checks made available to the investors.
-No collateral ?
-Hyderabad based company. :(
-Future regulatory action by RBI. (Remember SKS Microfinance)

Innovations??
-Can also allow giving loans to high risk borrowers (with bad credit history) so that investors can make a higher return. Have a category of borrowers like how we rate bond issues – AAA, AA+, AA- etc. Investors can choose based on their risk appetite.

-Allowing investors to “sell” their borrowers to other investors. This will give an exit option to the investor. If he forsees a default, he can take a small haircut and sell the portfolio to some other investor. Also will provide liquidity. So create a marketplace for the investors.

Best of luck,
Bhaskar,

Vinaya HS August 8, 2012 at 9:13 PM

@Bhaskar –

Wow! That is indeed some analysis!! I’ll check if the i-lend team can provide a detailed response to your feedback.

Thanks. :-)

Suresh Jayanthi August 9, 2012 at 1:25 PM

Dear Bhaskar:

Thanks for the insightful comment.

-Pretty high costs. Zopa charges 1% i think.

Zopa and others have grown over the years and built up a customer base which allows them to ffer reduced rates. Our rates are very competitive compared to banks and for the INVESTORS, we do not charge anything.

-Credit history checks done from CIBIL? Score made available to investors.

Tie up with CIBIL in process. Scores will be made available to investors. CIBIL scores are based on past history. If a person has not taken a loan or is early in his/her career (a new entrant to the workforce) CIBIL will have no data on such applicants. I-lend system offers meaningful data regarding the creditworthiness of such borrowers.

-What stops other NBFCs from starting such a scheme?

NBFCs can offer this service. But, fundamentally, any other financial institution raises deposits from public and lends money to public. Their business model is to make money on the difference between these two rates. Whereas, in P2P lending, an individual has no such pressure (no monthly lending target) and he/she can wait for a good creditworthy borrower for them to deploy their funds. Investors get better than normal returns and borrowers get cheaper loans with better terms. WIN-WIN!

-Any costs to be paid by the investors when i-lend hires recovery agent?

Yes, a percentage of the funds recovered will be charged.

-Are the complete details of the background checks made available to the investors.

Yes. All details on the profile are verified and listed on the site. These are available to all registered investors. Investors can make use of the information to make informed investment decisions. Please read this link for further clarity: http://www.i-lend.in/23/assess-borrowers-profile.html

-No collateral ?

Yes, It is a personal loan. It is an unsecured loan. We take lot of efforts to ensure that our investors understand this.

-Hyderabad based company. :(

So are GVK, GMR, DRL, Shantha Biotech. 

-Future regulatory action by RBI. (Remember SKS Microfinance)

We have checked with the regulatory authorities and there are no current regulations that govern P2P lending in India. We welcome regulation and feel that regulation will help the industry grow. We have contacted RBI in this regard.

Innovations??
-Can also allow giving loans to high risk borrowers (with bad credit history) so that investors can make a higher return. Have a category of borrowers like how we rate bond issues – AAA, AA+, AA- etc. Investors can choose based on their risk appetite.
-Allowing investors to “sell” their borrowers to other investors. This will give an exit option to the investor. If he forsees a default, he can take a small haircut and sell the portfolio to some other investor. Also will provide liquidity. So create a marketplace for the investors.

All are possible, part of our longer term plan which also requires other statutory clearances.

Vinaya HS August 9, 2012 at 1:49 PM

@Suresh –

Thanks for providing the detailed response.

Rakesh August 9, 2012 at 10:37 PM

Interest rates are way too high.

Bhaskar August 9, 2012 at 11:24 PM

Suresh,

Many thanks for the detailed reply.
On re-reading my post, it comes across as kind of harsh but I did not intend it to be. I truly think we need to bypass the banking system completely and admire your efforts and wish you all the very best.

Regarding the Hyd comment, many equity investors have a general distrust on new companies based out of there. If I were in your position, I would ramp up in the metros + BLR and highlight all the cities and not single out Hyd.

Thanks,
Bhaskar.

Srinivas August 10, 2012 at 1:20 PM

I found the post informative and thought provoking. Have to think it over.

The point of this comment is different.

I get to know good books from your book give away section. When ever you post about a book, i check the book, try to buy and read. I can say that i enjoyed at least two books thus suggested by you.

Keep up the good work.

Vinaya HS August 12, 2012 at 12:57 AM

@Rakesh –

What “interest rate” range do you feel would make the service more appealing?

@Bhaskar –

I personally feel that for a business any kind of feedback is pretty valuable. You did indeed bring out some pretty valid concerns.

Vinaya HS August 12, 2012 at 1:03 AM

@Srinivas –

Thanks. :-)

Would like to hear your feedback too once you’ve had a chance to think it over.

Coming to the books, they’re really my next biggest expense after petrol. I simply love reading books and have been doing so since early childhood. I still remember those days when I used to hoard my pocket money just so that I could go out and buy a software programming book. You just made me walk down my memory lane. :-)

Am glad that you liked a few suggested by me.

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