BharatPe forays into consumer fintech space with P2P product 12% Club

Joining the growing league of peer-to-peer (P2P) product offerings, fintech company BharatPe on August 24 said that it has launched 12% Club, marking its entry into the consumer domain.

Through this product, consumers will have an option to invest and earn up to 12 per cent annual interest or borrow at an interest rate of 12 per cent.

It has partnered with Reserve Bank of India (RBI) approved Non-Banking Financial Companies (NBFCs) to for this product. The company aims to achieve an investment Assets Under Management (AUM) of $100 million and a lending AUM of $50 million from this product by FY22-end, BharatPe added.

Suhail Sameer, CEO of BharatPe said, “We believe that 12% Club will strike the right chord with a diverse set of new-age digitally savvy customers- from young salaried individuals to professionals with disposable incomes, as well as the investors who park their funds in various financial instruments. The initial response has been phenomenal. In the pilot phase, we have seen great traction with a monthly investment run rate of $5 million and a monthly borrowing run rate of $1 million.”

The product will help customers avail collateral-free loans of up to Rs 10 lakh through the 12% Club app for a tenure of 3 months. There are no processing charges or pre-payment charges on the consumer loans.

The company added that the loan eligibility will be defined based on a number of factors including consumer’s credit score, shopping history using PAYBACK loyalty system, or payments done via BharatPe QR.

Consumers investing via the 12% Club app can withdraw their investment anytime, partially or completely, without withdrawal charges. First-time investors can start by investing as much as Rs 1,000 and will be eligible for a daily credit of interest.

BharatPe has currently set the upper limit for investment by an individual at Rs 10 lakh, which will be increased to Rs 50 lakh over the next few months.

“BharatPe’s P2P lending product for merchants has been one of our industry-defining products with Gross Investments of close to $700 million by over 6.3 lakh merchants. Also, we are one of the largest B2B Fintech lenders in the country, having disbursed over $300 million in business loans to over 2 lakh merchant partners,” Sameer added.

In a recent exclusive interview with Moneycontrol, BharatPe’s Co-founder and Managing Director Ashneer Grover had said that while the company will continue to deepen its merchant base, it would look at consumer lending opportunities too.

“So far, people used to think that fintech was only for payments. However, in payments, you can't make money in India. You can use payment as a mode for customer acquisition or offer as a service for free, but, eventually, you will have to earn money through lending. All fintechs in India will eventually have to be lenders,” Grover had said.

In the last three years, BharatPe has managed to on-board 7.5 million merchants. The company also joined the unicorn club after it announced on August 4 that it raised $350 million in its Series E fund raise, driving its valuation to $2.85 billion. The round, led by Tiger Global, also saw new participation from Dragoneer Investment Group and Steadfast Capital.