BharatPe is a merchants payments app that allows accepting UPI and card payments from any app for FREE. It makes payment acceptance simple by offering merchants a single QR to accept payments from Google Pay, PhonePe, Paytm, BHIM, Amazon UPI, and 150+ other banking apps. Consumers can also accept debit and credit card payments using BharatSwipe.
Recently, fintech firm BharatPe announced its foray into the consumer space with the launch of the 12% Club app. The app will allow consumers to invest and earn up to 12% annual interest or borrow at a similar rate. BharatPe has partnered with RBI approved NBFCs LenDenClub to offer this investment-cum-borrowing product for consumers. The company, which provides financial services to merchants, aims to achieve an investment AUM (assets under management) of 100 dollars million and a lending AUM of 50 dollars million from 12%Club by the end of the current financial year said BharatPe. All we know is that LenDenClub runs under peer to peer (P2P) lending platform and so 12%Club runs under the same platform.
The app 12%Club powered by BharatPe will be available on Google-Play Store and Apple Store App.
WHAT IS P2P LENDING?
P2P lending is not a new feature. In 2007, the Reserve Bank of India had brought this service under its regulatory purview. Even at the time, there were more than 20 P2P lending players in the market but RBI regulations ensured only the serious ones with watertight business models remained in the sector.
In P2P lending users sitting on idle money provide loans to potential borrowers identified by the service provider. These lenders then receive payments from the borrowers on a set basis either one time or in equated monthly instalments.
After RBI issued its regulations in 2017 the space saw a spree of fundraising involving some of the existing players in the segment. Some of the major companies operating in this space include RupeeCircle, Finzy, IndiaMoneyMart, etc.
ABOUT BharatPe 12%CLUB
Consumers on the 12% Club app can invest their savings anytime by choosing to lend money through BhartPe’s partners P2P NBFCs. Additionally, consumers can avail of collateral-free loans of up to 10lakh rupees on the 12%Club for a tenure of 3 months, as per their convenience. 12%Club app creates a place where borrowers and leanders agree with their terms.
BharatPe powered by the 12%Club app no need processing charges or pre-payment charges on the consumer's loans and added that the loan eligibility will be defined based on several factors including consumer’s credit score, the shopping history using Payback loyalty or the payments done via BharatPe QR.
Consumers investing via the app can put in a request to withdraw their investment anytime, partially or completely without any withdrawal charges. Consumers can start investing Rs. 1000 and the upper limit for investment by an individual are currently set at Rs.10lakh with able to get up to 12% interest credited daily. The company said this would be increased to Rs.50 lakh over the next few months.
What are the risks?
One of the biggest risks associated with this kind of lending is the non-repayment of loans. Given that P2P lending is a form of unsecured loan, there is no guarantee put up by the borrower for the lender to redeem in case of a default. However, the unsecured nature of the loan is also the reason behind the high return on investment compared to other debt instruments.
How to become a 12% Club Member?
- Download the 12% Club App
- Sign-up entering your Mobile number and OTP
- Create your 12% Club account by linking your Bank account, PAN and completing KYC
- Accept T&Cs
- Start investing or borrowing @12%
Example:
Limit given Rs.1,00,000
Interest Rate (APR) - 12%
Tenure. 3months
DrawDown Amount- Rs.20,000
DrawDown Date- 1st August 2021
Due Date- 31st Oct 2021
Repayment Amount- Rs.20,600
Customer can prepay at any time with no charges
Permissions:
12%Club take the following permissions from consumer to be able to assess your creditworthiness and for risk assessment purposes: Location and Contacts. Please read the permissions section carefully.
Contact:
For any queries, feedbacks and suggestions, email: support@twelve.club.
Effect of a new feature in the market:
The rolling out of P2P lending by CRED and BharatPe marks fintech companies are trying to roll out newer features to keep captive audiences within their ecosystem allowing them to earn and borrow at competitive market rates.