Having close to 17 years of experience in helping build Internet-based business platforms for Indiatimes, Timesjobs.com, Magicbricks.com, and SimplyMarry.com, it was almost inevitable for Rajat Gandhi to form his own innovative online business portal, Faircent. Faircent is a peer to peer lending (or P2P lending) platform that essentially provides a virtual marketplace where borrowers and lenders can interact directly, without having to go through the traditional financial intermediaries like banks, diminishing the margins for people in need of loans. Faircent has gained recognition from the industry in various fields. It was showcased as one of the top start-ups in Start Up India, selected for the first batch of NASSCOM 10,000, part of the Microsoft Accelerator program, one of the top 10 companies from India to be selected for Web Summit in 2013, along with several other prestigious awards under their belt.
My colleague once wanted to buy a motorcycle and he had posted on Facebook requesting his friends and family for a portion of the funding, and in a week, he was riding his motorcycle to office. This incident, coupled with my knowledge and experience in building online exchanges previously, led to Faircent.com.”
Waiting for the right time
“The idea of Faircent.com was born out of a personal experience”, Rajat says. A colleague of his used to borrow small loans from multiple friends for a particular need, and Rajat goes on to say, “He once wanted to buy a motorcycle and he had posted on Facebook requesting his friends and family for a portion of the funding, and in a week, he was riding his motorcycle to office. This incident, coupled with my knowledge and experience in building online exchanges previously, led to Faircent.com.” However, Rajat didn’t feel, in 2011, that the ecosystem was conducive for a P2P finance platform. And another obstacle for him was the fact that the concept of Digital Payments was still evolving back then. In 2013, however, the ecosystem was more conducive to create Faircent, so the company was incorporated, after spending almost a year in developing the product with the co-founder & COO of Faircent, Vinay Mathews, in 2014.
As the largest P2P lending platform in India which has facilitated disbursement of more than INR 17 crores since inception, we are responsible for many firsts in the P2P lending industry.”
Knocking over the obstacles
The road to success for Rajat was filled with obstacles, though. Especially at the embryonic stage in his business, the Faircent team had to heavily invest in building and re-building their underwritten mechanism. Delinquency and misrepresentation of data by the borrowers or lenders was an obvious obstacle to overcome, and they have worked extremely hard to get around this and build a system that can mitigate that risk. Rajat says that this is their biggest priority and their biggest investment in terms of time and resources. The hard work to build a robust structure around their business has made Faircent the largest P2P lending platform in India. Rajat says, “As the largest P2P lending platform in India which has facilitated disbursement of more than INR 17 crores since inception, we are responsible for many firsts in the P2P lending industry.” Faircent was the first to tie-up with ‘Baxi’ to provide collateral based loans to its drivers, the first to introduce legally-binding virtual signature of loan agreements using Government of India’s digital stack, and more recently, they introduced Escrow account under the trusteeship of IDBI and are soon launching Automated-Investment.
Envisioning a lucrative future
Basing it on past data, Faircent has foreseen radical growth in P2P platforms for cumulative lending. Rajat says that the potential is immense as a there are plenty of unutilized funds and many more in need of such funds, and goes on to say, “With the help of technology, P2P lending can bridge this gap. For example, a major portion of the loans transacted are by micro and SME sectors and there are 57.7 million small businesses in the country.” Faircent now wishes to improve their technology and enable tech-enabled processes like the Virtual Signing of Agreement, Lender Escrow account, etc. With proper government support and regulation, Rajat believes that the P2P market in India can attain a size of 4-5 Billion USD in 4-5 years, and we’re sure that Faircent is going to own the bulk of this market by making life easier for people in need for a loan.