What do you do when you see your colleagues borrow money from co-workers to meet their urgent needs, that too paying exorbitant interest on the short-term loan? If you are Vaibhav Kumar Pandey, you seize the opportunity and start a venture to make a business out of it.

Vaibhav graduated in nautical studies, served as a deck officer in a couple of shipping companies, before doing an MBA from IIM-Ahmedabad. Thereafter, he worked in an edible oil company after which he joined a tech publishing company based in Delhi. It was here that Vaibhav, 36, noticed that a lot of colleagues, earning ₹25,000-50,000 a month, borrowed money from others in the office to meet some urgent need, paying as much as 3 per cent interest a month. “Interest rate of 2-3 per cent is common among colleagues,” says Vaibhav.

As it is, Vaibhav and his friend from school, Raghavendra Pratap Singh, who was also a colleague at the tech publishing company, were itching to do something on their own. This money lending that was happening in office piqued their interest. They were shocked to find that some were borrowing at even 5-10 per cent interest a month; rates normally charged by money lenders, says Vaibhav. These people found it easier to borrow from colleagues for short-term needs rather than go through the banking system.

“We did a survey of 100-odd people in the company just to see how many took these loans. We were shocked to see that more than 50 per cent had taken some kind of loan on interest from friends, colleagues and even their bosses. It was clear that if this is a segment that is banked and still finds it difficult to get small, immediate loans, then there is a huge opportunity,” says Vaibhav.

They zeroed in on the idea and floated i2iFunding.com, an online peer-to-peer lending platform based in Noida, Uttar Pradesh, which went live in October 2015. i2iFunding.com, says Vaibhav, brings together both the borrowers and the investors, providing borrowers quick access to money at a more reasonable interest rate and the investors, a safe and secure investment option giving them a higher return than what is available elsewhere. The venture was bootstrapped and it raised ₹2 crore from four angel investors in May 2016. It is now in the market looking to raise about ₹5 crore to grow the business and strengthen technology.

Evaluating borrowers

Vaibhav says the company has created an automated credit evaluation model using alternative data sources, including mobile phone usage and social media footprint. They have classified borrowers based on their risk profile and the interest rate varies accordingly; for the safest category the interest rate will be 12.5-15 per cent annually and for the riskiest, 25-30 per cent.

After evaluating the loan applications, i2iFunding puts up the profiles on its platform, where the registered can see the detailed profile, the risk category the person belongs to and the rate of interest that has been approved. After a physical verification of the borrower, those willing to lend will get to sign separate agreements. The repayment gets deducted auto mandate and the money will come into an escrow account, from which i2iFunding will disburse it proportionately to the lenders. It charges the borrowers and the lenders.

According to him, it has 3,000 investors and over 30,000 registered users. “We have disbursed close to ₹8 crore till now. Every month, we are disbursing ₹70-80 lakh. When we raised our first round of funding, we were doing ₹5-8 lakh a month.”

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