HYDERABAD: Alternative lending startups have witnessed a spike in lender registrations after the currency ban as people are now looking to park their investments on their platforms rather than in real estate, gold or the stock market.
Sequoia-backed invoice discounting marketplace KredX has noticed a 4-5x increase in lender registrations on their platform since November 8, including from high net-worth individuals (HNIs) and institutional lenders like banks and non-banking finance companies (NBFCs).
“Invoice discounting is becoming an alternative to the three asset classes which are real estate, bullion and stock market because it provides higher liquidity and a decent yield on their investment,” said Manish Kumar, chief executive of KredX, whose lenders receive interest ranging from 11-20%. Banks and NBFCs are looking to lend via alternative lending platforms following the government’s push for digital transactions which is incentivising online lending.
“We are noticing strong interest from banks and NBFCs to partner with us because demonetisation is pushing SMEs to go digital, which makes them more lendable by online lenders like us who thrive on data,” said Sashank Rishyasringa, cofounder of online lending platform Capital Float, whose institutional partners have been scaling up their lending since the demonetisation move.
Similarly, peer-to-peer lending companies like Faircent, i-lend and AnyTimeLoan.in (ATL) have noticed an approximately 3x increase in lender registrations as other investment channels seem unstable or inaccessible following the cash crunch.
“Earlier, a lot of money was parked in real estate,” said Vinay Mathews, founder, Faircent.”Suddenly, our business model makes sense for investors like salaried professionals, small business owners, money lenders, HNIs and institutional lenders.” A chemicals business owner from Hyderabad, BVP Raju, finds i-lend a lucrative platform to invest in. He says it brings in higher interest rate and stability, making this a much better way to invest his idle money.
“On our platform, the average rate lenders get is about 18%, which is why a lot of individuals prefer to invest with us instead of keeping their money in a savings account,” said Shankar Vaddadi, director of i-lend. While there is strong interest from individual lenders, Hyderabad’s ATL is also in talks with three NBFCs to become a lender on their P2P platform.
“NBFCs come with bigger ticket – Rs 2-5 crore, which sizes of around will make it easier for us to meet the demand of borrowers,“ said Keerthi Kumar Jain, chief executive of ATL.
Credits ET Realty