Mumbai, 06 Aug 2019: PaisaDukan, an emerging Peer-to-Peer (P2P) lending platform has come up with some exciting news for the P2P industry.
Post completion of 5 months of successful lending operation in Madhubani district of Bihar the company has managed with Zero Defaults and Zero Days delay in EMI receivables.
The results are exciting and paving way for further expansion.
Government and the Reserve Bank of India both have recognized Microfinancing as a backbone of financial inclusivity.
Madhubani is one of the districts in Bihar which receives funds from the Backward Regions Grant Fund Programme (BRGF). The rural sector remained untapped market for P2P lending companies due to various risk factors.
With aiming for wider financial inclusion PaisaDukan started its first rural operation branch in Madhubani district of Bihar in the month of March 2019 as a pilot program.
The initiative made PaisaDukan the first company from the P2P ecosystem to take a step ahead for Rural India.
“Bihar – being the least literate state, the third most populated state, and having a 34% of its population under the poverty line – is ideal for a pilot study of financial inclusivity,” said Mr. Rajiv Ranjan, Founder & CMD PaisaDukan.
Last month the company received a second round of funding from JITO Incubation & Innovation Foundation (JIIF) and will be used in hiring experienced key resources to support the company’s rural expansion plan.
“Microfinancing is the backbone of financial inclusion, especially in countries like India, NABARD identified several obstacles in its execution like lack of support in financial inclusion, inadequate outreach in several regions and delay in disbursement of loans. P2P lending can serve the purpose but its untapped and the industry is at the nascent stage”.
“A solution already exists but is untapped – P2P financing. We believe P2P lending can serve as the best possible solution to these challenges. We provide last mile credit to rural borrowers.
Since 70% of our borrowers have no credit history, we give them a PaisaDukan score based on our unique set of criteria specially designed for rural borrowers. It is also an opportunity for them to repay on time and begin with good credit score”, added Mr. Ranjan.
After launching the pilot in 20 villages of Madhubani, in a span of 05 months, PaisaDukan has received 800+ loan applications. With an average ticket size of 25,000 – 50,000 rupees and tenure of 6 – 12 months, the company has disbursed 1.1 Cr rupees in principal to date, at an average interest rate of 12%. There are Zero default and Zero Delay in EMI payments reported by the company for this rural operation.
In the month of July, Madhubani was severely affected by flood and this raised demand and on the good side, the August month EMI collection has been 100% in this flood-affected area.
This has elevated the confidence of the company on the current operating model and also on the credit consciousness of the rural borrowers.