Savings accounts are good, but their interest rates are relatively less compared to other investment products. Loans may be boons, but the process involved to get a quick short term loan is tedious. More than 78% of Indian population can’t avail loan from banks as they belong to unorganized sectors. Peer 2 Peer (P2P) lending would help bridge this gap. P2P lending has gained a huge traction in countries with strong financial markets such as China & UK. Reserve Bank of India (RBI), which is India’s central banking institution, is also keenly studying P2P lending to regulate the same. P2P has too many merits and at the same time involves huge risks as well. These risks can be hedged with the intervention of a bank or have a financial institution act as a broker.
Social Lending, in simple terms, is just lending to your friends and family. Lending to the people you know reduces the risk to a huge extent. A team of 4, Sumy, Asadulla Sharief, Pavan and Paranthaman of MSIL presented Peer 2 Peer social lending concept in the name of “VRIDHI” for the ICICI Appathon competition.
This lending platform enables the Lenders to list their offers via the web portal or the mobile app. In the same fashion, the Borrowers can also place a request based on their needs. The system will match the need of the Borrower to the Lender’s offers and prompts the Borrower with the matched offer. The Borrower can also browse for lending offers from the portal. Then, the Borrower selects the offer that benefits him the most and the amount is credited upon the confirmation from the lender. The system will also automatically rate the Lenders and the Borrowers based on their previous transactions. The bank, being a broker in the middle benefits from the service charges and the maintenance charges that are levied from the Lender and the Borrower. The bank can also cross-sell their products that closely match with the requirement of the Borrower. This platform also comes handy for the merchants too. As Lenders, they can sell their products to the customers (Borrowers) and map the payments as easy instalments.
The following are the distinct features of the proposed solution.
- P2P between account holders of the same bank (Beneficiaries)
- P2P between Facebook contacts
- A Web Portal
- Automated rating of Lenders and Borrowers
- Cross selling opportunities for merchants
Below is an armature video of the POC demo.
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About Market Simplified: Market Simplified is a thought leader in handcrafting custom solutions by continuously innovating and simplifying finance. We have maximized the revenues of industry leaders like OptionsXpress (Charles Schwab), Currenex (State Street), MB Trading, Maybank Kim Eng, Kotak Mahindra Bank and National Stock Exchange of India by providing enhanced and sustained user engagement through Experience Engineering.
About The Author: Gokoulane Ravi is a foodie, technology enthusiast and a developer turned marketer with more than 5 years of experience in the space of mobility. When he is not working, he likes to read, write, run and cycle.