Singapore-based fin-tech start-up FinMomenta, which entered the Indian online P2P (peer to peer) lending market early this year with its product called Tachyloans, will soon be lending to salaried professionals working in small and mid-size firms.

FinMomenta claims that it is the first such company or start-up to introduce such a product.

Called Corporate HR loans, FinMomenta aims to make lending easier for the working class. The loan size ranges from ₹50,000 to ₹5 lakh.

Brahma Mahesh Khaderbad, CEO and Co-founder of FinMomenta, told BusinessLine that getting a loan is a big challenge for employees working in small companies.

While large companies can afford to have a reserve to provide loans to employees, most small- and mid-sized companies don’t have such a facility and hence the employees need to approach banks, which is time-consuming. Besides, many banks don’t provide small-ticket loans.

Corporate tie-ups

“Most of the bank loans are long-term with a minimum tenure of one year and above and the employees have to pay penalty for pre-closure when they want to close these loans. “Corporate HR loans will hence allow a corporate employee to apply for a loan online from his workstation and the funds will get credited to his/her bank account. The employee will also have flexibility to pre-close the loan when he/she has funds available,” he said, adding that while the interest rates could start from 11.5 per cent and go to as high as 25 per cent , the aim is to make the loans available to the employees in the time of need.

The company has so far tied up with 25 corporates in Bengaluru and Chennai for these short-term loans and is in the process of tying up with over 100 more this year and aims to take it up to 1,000 small and medium companies next year.

Preventing defaults

In a bid to prevent defaults, which Brahma says is quite unlikely, the product requires a corporate to sign up with FinMomenta to take the repayment in the form of EMI before the salary is disbursed.

The employee is expected to clear the loan when he/she leaves the organisation.

Besides, the company has a strong in-built monitoring model where technology is used to monitor the borrower based on mobile, social and bureau data to get early warning signals to identify changes in location and spending behaviour.

The company plans 2,000 loans this financial year and 10,000 in 2018-19 by tying up with various NBFCs for funding the loans.

It is also in discussions with some of the banks in this regard.

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