Variety of Loans9.0/10
Ease of Use8.0/10
Mobile App Usability and Speed7.0/10
- Onboarding Process and great
- Multiple Type of Loan Options
- Experienced team
- Mobile app is robust
- Customer support is good
- Managers focus less on low investment profile
- Options can feel Overwhelming
- Website Looks from 90s and need a more morden look
- Mobile app can be a bit slow
Lending is an age-old concept. So is Peer to Peer Lending. Peer to Peer lending is also called Person to Person Lending. One person(Lender) who has extra money lends money to another person(Borrower) who needs money for some purpose like business, emergency, health or education etc. Since old times, money lenders and wealthy people have been lending money to the poor at interest against mortgages.
The government around the world authorised Govt. banks to handle money lending. As privatisation and reforms took place in late the ’80-’90 multiple private banks opened. But the banks were mostly brick and motor store and could not meet the demand of many borrowers as verification and collection became challenging. With the advent of the internet, many of this bank went online, but lending was still the same. They depend on physical verification, which limits the reach. They could not lend to all, depriving many rural parts and migrant workers to the mercy of money lenders who charged hefty fees and exploited them. Credit Scores were developed to ease the lending process, but credit scores did not address the young lender who had just passed from college and did not have a credit history.
Enter peer to peer platforms. They are trying to fill the lacunas by having most of the borrower verification process online through innovative AI-based analysis that continuously learns and improves. Thus, identifying groups of borrowers that are reliable but banking systems can’t reach.
Faircent has championed the cause of Peer to Peer lending and today we will do a detailed Faircent Review.
India’s 1st Peer to Peer PlatformRef : Faircent
The 1st platform for Peer to Peer lending in India
2013 saw the launch of Faircent, the 1st peer to peer marketplace in India, and have survived the ups and downs of the market for the last eight years. Faircent through experience has evolved and has a professional team backing up the platform. So the from onboarding to lending, it feels much smoother than most peer to peer network.
The variety of loan profiles they have
Faircents most significant advantage is industry-wide tie-up for loans which allows investing in a wide variety of loan providers and types of loan. From education to healthcare. From rural to tie-ups with Fintech companies like Mobikwik for loans. It helps in diversifying our lending.
The security and reliability of the platform
For Eight years, people are making money from the platform, which brings in reliability. However, no Peer to Peer Platform can give a reliability guarantee. But Faircent is at least reliable over a period.
Loan Profile Testing Parameters
Over the years, they have increased the number of parameters, and the rating and +ve and -ve section in each profile help make an educated decision. Also, they check a profile in several parameters before giving a rating or allowing borrowers to list in the platform.
Faircent has a simple process for registration.
You enter your details. Please give them a scanned copy of the ID proof, address proof and Pan card. Provide your bank details for the transfer from Faircent when asked.
Once you provide the documents, which is generally coordinated by the onboarding manager from Faircent, you get a call from the manager assigned to help in onboarding and ensuring your documents are in place, and your KYC is approved. Unlike other platforms, this hand-holding makes the process very easy and something I found outstanding.
Once KYC is approved, you have to transfer funds to the Faircent Escrow account. You can get the details from the Escrow Passbook tab on the left column.
Escrow accounts are generally from ICICI bank and start with FAIRLF……. . Generally, Banks mobile Apps cannot add this, and you need to log in to your browser to add the account.
Now you can add the money. An Account manager is assigned to your account. They call you, or your onboarding manager gives you his details. You can also see his details on your main dashboard below your name.
The Main Dashboard looks like the above. going through the panel
Each of them is described in brief below :
Faircent Review would be incomplete without its loan profiles. It’s the most significant advantage of Faircent is multiple loan profiles to choose from, from corporate to the individual to self-help group. Below is a non-exhaustive list of loans type available in Faircent, along with the brief details of the same.
There is 3 Primary Type of Loans
1) Term Loans
Term Loans are either to Individuals or to group loans.
2) Pool Loans
Pools Loans are Loans that a company backs. So investor pool money with a minimum investment of 1,00,000/, the total pool is in Crores. The company takes the money and further lends on interest. The interest is 12-14%. Generally, the amount in such loans is very safe as the company takes the risk of bad loans. Pool Loans is for big investors who want a fixed return on investment.
3) LOC Loans
From Faircent Website
LOC Loans are new loans and will soon be available in Faircent and is at present not available.
Statistics of Faircent
DPD**: Days Past Due
- The Net Annualised Return rate is 7.83 % at Faircent.
- A Cautious Portfolio across all DPD is only 0.1% although the returns are also low 7-10%.
- A Balanced Portfolio, the DPD total is 8%. The return is 15-18% and makes up for the due outstanding. Here you have to note that DPD 90-180 days still has a chance of recovery. So actual DPD will be lesser.
- Anything above Balanced is Risky.
- If Aggressive and Super Aggressive Portfolio are chosen then it should be complemented with a big investment in either the Group Loan or Pool Loan to balance the risk factor.
Final Word on Faircent Review
While working on our Faircent review, we found it is an old and reliable platform for people looking for long term investment. A minimum of 4-5 years investment would result in good returns and as they further they are refining loans profiles so as to reduce defaults. Also, the CEO, Rajat Gandhi has vast experience in this field and is the President of the Association of NBFC-P2P Lending Platforms so there is a sense of reliability with the team.
There are a few points they could still work on :
- The website has not been refreshed and is old school. Their app is not the best and hangs at the login screen from time to time. This is a clear sign of stagnation caused by the old guard of the company. Finzy.com has such a clean and easy to use interface.
- If the amount invested is low, some account managers do not spend time with the client and give generic suggestion. Also, they seem disinterested at times. Faircent should give importance to even small investors because they might be prominent investor in the future.
- They should re-evaluate some -ve or +ve criteria. Like its -ve criteria if a person has an office in his own house, but it can be a big positive as he does not have to pay rent. He does not have to pay rent.
- A video explaining the features of the website or a PPT would be great for people starting. As the Interface can be overwhelming.
Should you Invest?
Yes for Investors who can invest upwards of Rs: 2,00,000/- and can hold for 4 – 5 years and play smart, you can expect very good returns above general Mutual Funds and FDs.
If you like our Faircent Review you can read more Reviews of Fintech Startups below :