i2ifunding.com : P2P online lending platform

by Gopal Gidwani on April 26, 2017 · 3 comments

in Financial Planning,Fixed Income Securities,Others

In this article, we explore i2ifunding.com, a P2P online lending platform through which you can give loans to individual borrowers just like what banks / NBFCs do. But the difference is you can get up to 100% principal protection against loan default by the borrowers.

Lack of investment options
If you are looking to invest Rs. 50,000 – Rs. 1,00,000 (spread over the next few months), let us explore the investment options that you have:

  • Bank fixed deposits: Today a 1 year fixed deposit is paying 6 – 7% interest rate. After paying income tax on interest, the net return is 4.8 – 5.6% only (if your income tax slab is 20%) and even lower net return of 4.2 – 4.9% (if your income tax slab is 30%)
  • Gold: The prices are stuck in a range of Rs. 29,000 – 32,000 / 10 grams since a couple of years offering limited scope for appreciation.
  • Equities: With equity markets at new highs, in the short term, the risk – reward ratio is not very favourable at this point of time. If you are a long term investor and wish to invest through a monthly SIP for a minimum of 5 years, then you should go for equity mutual funds.
  • Real estate: Since your investment is Rs. 50,000 – Rs. 1,00,000, real estate is out of question due to the high investment amount required. Even if your investment amount is much higher, the returns from real estate will be limited due to already high prices and sluggish demand, thus capping price appreciation.

So what are the other investment options that you can explore? Just like you, there are many other investors with a similar investment amount (Rs. 50,000 – Rs. 1,00,000) who are looking for an answer to the same question. In this article, we make an attempt to answer the question by exploring Peer-to-Peer (P2P) lending websites.

Investment opportunity provided by Peer-to-Peer lending website/s
Peer-to-Peer (P2P) lending websites like i2ifunding act as intermediaries between loan borrowers and investors (loan financiers). Through these platforms, individuals (investors) like you, who have surplus money and are looking for investment avenues, can give loans to borrowers (just like banks and NBFCs). Individuals (investors) can earn good returns in the form of monthly EMIs. So as an investor you can explore this investment option and earn high interest up to 36% p.a.

Legality of the business: In August 2017, the Reserve Bank of India (RBI), through a notification, has classified P2P lending platforms under Non-Banking Finance Company (NBFC) category. On 4th October 2017, the RBI issued regulations for Peer to Peer Lending Platforms. All P2P lending platforms will be regulated by RBI. So this is a legal business allowed by the RBI and the Government.

Sounds interesting? Let us see how to proceed.

Why i2i funding.com?
While there are quite a few P2P lending platforms that have emerged over the last couple of years, let us understand what the benefits are for you as an investor for investing through i2ifunding.
1) High returns: By investing through i2ifunding, you can give loans to various borrowers and earn high returns (interest) up to 36%.
2) High quality loan projects: The i2i team does the credit risk assessment of loan proposals received using its i2i proprietary Credit Score Model. The borrower is assessed on 40+ parameters such as credit history, education, job stability, income details and other behavioural patterns. This ensures only high quality loan borrowers are brought forward to investors like you for consideration for funding.
3) Up to 100% Principal protection: An investor has the option to choose up to 100% loan principal protection. In the case a borrower defaults, the proportionate outstanding principal will be repaid by i2ifunding depending on the extent of principal protection (0% to 100%) chosen by an investor. This is an additional layer of safety net for the investors over and above point 2. More on principal protection later in this article.
4) Easy and transparent process: The registration and KYC process is online, quick and hassle free. You can choose the borrower / loan that you wish to fund with a minimum investment of as low as Rs. 5,000. Sounds interesting? Let us go through the investment process.

Investment process 
 P2P online lending platform

  • You can create your investment account and complete the KYC process online in a matter of few minutes. At the time of registration, you need to enter your personal details along with your PAN number. You will need to upload a soft copy of your photograph. Click to register (or if registering directly then enter our referral id: 2668).
  • Browse through the borrower loan details like credit score, interest rate, and risk category.
  • Go through additional details of the borrower that interests you. Borrower details mentioned include: purpose of the loan, income of the borrower, EMI to income ratio, average monthly bank account balance (for last 6 months), income from other sources, details of other existing loans, documents verified and other details. All these details help you assess the borrower’s credentials and decide whether you wish to fund the borrower.
  • After going through the details, you may input the amount (minimum Rs. 5,000 and in multiples of Rs. 5,000) you wish to fund and wait for other investors to fund the remaining loan amount and complete the funding process
  • As the next step, the physical verification of the borrower is completed. The legal agreement is signed with the borrower and a digital copy is shared with all lender / investors.
  • You then need to transfer the funds to the borrower. You will start receiving EMIs directly in your bank account from next month.
  • You may repeat the same process for multiple loans and build a diversified high return loan portfolio by investing in multiple loans. You can now see your investment returns grow month-after-month.
  • The “My Account” section provides you all the details of your portfolio at any point in time.

Risks involved and principal protection
All investments carry risks, the difference being, some carry low risk and some carry high risks. Like any loans given by banks or NBFCs, loans given on the i2ifunding platform also carry the risk of default by the borrower. However, i2ifunding has cushioned the investors against the risk of default, by offering the option of choosing up to 100% principal protection. The principal protection feature is optional and the investor can choose the desired principal protection % (0% or 25% or 50% or 75% or 100%). For example, if you have chosen 100% principal protection for a particular loan and if the borrower defaults, then 100% of the outstanding principal will be paid back to you by i2i from the Principal Protection Reserve.

Using the i2i’s proprietary Credit Score Model, each loan, based on the borrower’s credit risk, is assigned an i2i Risk Category from A – F (A being the strongest / safest category to F being the weakest / riskiest). Based on the risk category of the loan, you may choose the extent of principal protection % (0% or 25% or 50% or 75% or 100%) you would like to avail. Based on the extent of % principal protection you avail, i2ifunding will deduct a small fee from the monthly EMI that will be paid to you. There are NO upfront fees for principal protection. The below diagram illustrates how the principal protection feature works:

i2i Principal Protection

i2ifunding will return the proportionate outstanding principal (depending on % of protection chosen) to the investor from the principal protection reserve if the borrower defaults. For example, if you have chosen 100% principal protection for a particular loan, and if the borrower defaults, then i2i will pay you the entire outstanding principal from the Principal Protection Reserve. So investing through i2i funding is safe and offer returns higher than other fixed income instruments like deposits, bonds etc.

Conclusion
Coming back to the investment query with which we started this article, if you have some surplus funds and are not finding investment options as per your requirement, then www.i2ifunding.com is the place to head to. With i2ifunding you can start investing with an investment amount as low as Rs. 5,000, get an opportunity to earn interest up to 36% along with up to 100% principal protection. What more could you, as an investor, have asked for?

I have been investing through this platform since September 2016. So, I have been investing since more than a year and my experience so far is good and I am happy with it. Click to register as an investor (or if registering directly then enter our referral id: 2668)

In case of any queries please comment in the section below or write to us at gopal_gidwani@yahoo.com

{ 3 comments… read them below or add one }

Deepak Raj May 1, 2017 at 9:30 am

If borrower doesn’t pay the emi to the investor???

Reply

Gopal Gidwani May 1, 2017 at 9:56 am

Hello Deepak,
If the borrower does not pay, then i2i funding will pay 0% to 100% of the outstanding principal, depending on the % of principal protection chosen by the lender / investor. The lender / investor has the option to choose up to 100% principal protection against borrower default. The amount will be paid from the principal protection reserve.

Reply

Poonam Lunkad Nahar August 19, 2017 at 7:30 pm

Very informative and well explained

Reply

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