RupeeCircle Tie-up With Tata AIG Makes P2P Lending (More) Viable For Lenders
What do stock market investors fear the most? The dollar ($)? Terrorist attacks? Elections? Brexit? America? North Korea? Inflation? Recession? Oil reserves? Mergers? Acquisitions? This list of conundrums faced by investors is interminable. The seasoned investors however not only ride this tide of uncertainty but also seek out newer avenues of investments. One such avenue that is gaining the trust of investors is the P2P lending platform. Although still in its nascent phase in India, P2P marketplace can give return on investments up to 30%. At RupeeCircle, India’s fastest growing P2P lending platform, the average return on investment is up to 24%.
So, now the question arises – “What do P2P lenders fear the most?” Borrower default and only borrower default. Although RupeeCircle emphasizes the need to diversify investments across different borrowers, a single defaulting borrower affects the overall return on investment of an investor.
The stringent credit underwriting process of RupeeCircle has ensured that the default rate since its first loan disbursement has been capped below 2%. And although the underwriting process has been successful in avoiding loan disbursements to wilful defaulters, unintentional defaults by borrowers are impossible to gauge. Unintentional defaults can be due to various reasons including loss of job, hospitalization, permanent total disability, and accidental death. So far, since its inception in 2017, RupeeCircle has disbursed more than INR 30 million as personal loans and yet the number of defaulters due to the previously mentioned reasons is nil. However, as more people become aware of the hassle-free benefits of P2P lending, more and more borrowers will get listed in its marketplace and the likelihood of such defaults will increase.
So, how does RupeeCircle plan to eliminate borrower default and safeguard lender investment?…
RupeeCircle has allayed the fears of lenders by forging a strategic partnership with the fifth-largest private general insurer in India, Tata AIG General Insurance Company Limited. Now the borrowers are covered against the following risk: –
- Accidental death
- Permanent total disability
- Borrower hospitalized for more than 30 days. (Insurance will cover EMI for 3 months)
- Loss of job. (Insurance will cover EMI for 3 months)
This tie up with Tata AIG is another feather in the cap of RupeeCircle as lenders on the P2P platform can now be more confident about their return on investment. Strong credit underwriting practices coupled with insurance on investments warrants that the money you invest is the money you earn.