Bengaluru-based P2P lending platform Finzy has raised $1.3 million in its pre-series A funding round from a clutch of undisclosed investors. With this fresh round, Finzy will expand its team to make loan process faster and easier.
The proceeds will also be deployed towards sprucing up technology aspects and expanding footprints across tier I cities.
For uninitiated, peer-to-peer lending platforms are online technology-based players who connect lenders with borrowers. With their algorithms and decision-making abilities, they help lenders take a call on the creditworthiness of the borrowers and also enable quick disbursal of loans at reasonable interest rates.
Founded by in 2016, Finzy connects borrowers and lenders through a credit assessment algorithm. It also enables lenders to earn monthly returns handsomely.
The company claims to offer loans to its customers within 48 hours at interest rates starting from 10.99 per cent. Finzy also claimed to be the first applicant for NBFC P2P license after RBI published its Master Directions on P2P lending industry in October 2017.
Over the past few years, several SMEs and individuals focused fintech companies have emerged. Such platforms are easing the traditional paper-led processes in obtaining loans. They also tend to do due-diligence on behalf of lenders.
Meanwhile, the growth projections for the P2P lending market is estimated to be worth around $4-5 billion by 2023. Besides Finzy, there are a slew of players who are connecting lenders and borrowers. Mohandas Pai-backed Faircent is considered as a larger player in the space while platforms like Rupaiya Exchange, i-lend, Lenden Club are some of the other notable startups
To safeguard their interest and promote P2P lending, startups from the segment had also formed ‘Association of P2P Lending Platforms’ which is headed by i-lend founder Shankar Vaddadi, and vice president Vinay Mathews, Founder, and COO, Faircent.
The association aims to work in conjunction with the government and regulatory authorities in matters of compliance and to further the cause of financial inclusion in the country.
Importantly, in September last year RBI had identified P2P lending companies as a special category of non-banking finance companies (NBFCs) who will be regulated by the banking regulator.
The news was sourced from ET