We recently spoke to Shankar Vaddadi, the founder of i-lend. i-lend is India’s first and leading online p2p lending platform, connecting individual borrowers with individual lenders. Shankar Vaddadi is a seasoned professional having held leadership positions across various industries and public companies in India.
How did i-lend first started?
i-lend was first conceived in 2012 when I realised that Technology has evolved to an extent that it can be a true disruptor of traditional models. Slashing loan origination and Credit distribution costs were eminently possible through technology and building an alternate finance business was doable with the advent of technology and the spread it had achieved in a country like India.
How is i-lend different from other p2p platforms in India?
i-lend is the first and it pioneered this sector in India. Understanding the business landscape which includes legal, regulatory and engaging all the stake holders from inception has been i-lend’s strength. i-lend also exclusively focuses on unsecured personal loans and is not getting into business loans etc which other platforms are for getting or showing some early traction. i-lend also is the first platform to use Technology for complete verification, authentication and credit decisioning unlike others who still use conventional methods. In that sense we are truly alternate finance business building an alternate financial ecosystem.
What are the interest rates and fees like?
On i-lend we have capped interest rates at 24% for borrowers. We are focused solely on salaried individuals and self-employed professionals as borrowers and our approach is that fixed income people will not be able to service interest rates of more than 24%.
Who are the typical borrowers and why do they borrow from i-lend instead of banks?
Our borrowers are typically salaried with min 6 months employment track record and are in need of money for a variety of casual needs like doing a short term course, event or function in the family, retiring high cost loans, home improvement etc. The main reason they come to i-lend is the user friendly nature of the process, transparency, speed and the quantum of loan they require. Banks also do not give unsecured loans without a minimum of 3 plus years financial track record and also if they are already not customers of them. This means that people who work in tier 2 companies have tremendous difficulty in getting loans even if their credit is good and they are stable. Plus the features of i-lend which does not penalise prepayment of the loan etc are also crucial in getting borrowers.
What is the credit approval process like?
i-lend’s credit approval process is three pronged. First one is Verification and Authentication which includes KYC information. Second stage is financial analysis and algorithms that tell us loan eligibility based on several qualitative and quantitative factors that include deep learning methodologies of social behaviours etc. Third is the actual decisioning based on a combination of the above two plus other financial data which might include credit scores, assign social scores leading to a rating.
Can you tell us about i-lend’s track record so far?
i-lend has deliberately kept a low profile from an expansion standpoint more so because India’s central bank is also working on framing a set of regulations for companies in this sector. However i-lend is now operating in three cities and has done over INR 1.7 Crores in disbursal over 300 loans with a default rate of below 0.5%.
What do you see as the key challenges today?
Key challenges are the diversity in the country, demographical and geographical challenges, data availability and its integrity. Finance companies in India have to behave and also appear to be extremely respectable, transparent and customer centric.
The Let’s Crowd Smarter Team thanks Shankar and i-lend for this interview.