Faircent features in Forbes 9th Anniversary special amongst Top 9 Start-Ups with promise - the ventures making the right noise.

Name: Faircent

Founder: Vinay Mathews (left), Rajat Gandhi, and Nitin Gupta (not in picture)

Headquarters: Gurugram

Revenue: Undisclosed

Funding: $9.8 million



Faircent: Banking on peers



Faircent has much to thank legendary motorcycle maker Royal Enfield. After all, since starting out in 2014, the Gurugram-headquartered peer-to-peer lender is today India’s largest such operator and disburses loans of over ₹3 crore every month. 



Rajat Gandhi, 45, the CEO of Faircent, credits the beginnings of his company to a former colleague’s wish to buy a Royal Enfield. “I had a colleague who said he was buying a Royal Enfield bike,” Gandhi tells Forbes India. “His mother gave him ₹30,000 and he was looking to crowdfund the remaining amount. He posted his request on Facebook and managed to raise the remaining ₹30,000. That’s when it occurred to us that peer-to-peer lending is a possibility and we began to explore the idea seriously.”



Peer-to-peer lending is a form of crowdfunding where an online platform brings individual borrowers and lenders together to raise or lend unsecured loans without a middleman. The rate of interest and the tenure of the loan are decided by the platform, based on a thorough analysis of the borrower's profile.



Faircent began operations in 2015 and follows a model similar to banks. The borrower signs up on the platform and makes a request for the loan. “The loan isn’t provided by one person. It’s pooled from various lenders,” says Gandhi. “Here, an individual is competing with a bank to get a borrower. We assign a score on the borrower based on his ability and intention to repay.”



Faircent charges a commission for providing the service. The borrowers are charged 2.5 percent while the lenders are charged 1 percent on transactions. In return, it analyses the profile of the borrower based on his CIBIL score and provides a risk rating. 



Currently, the company has a restriction of ₹10 lakh per individual and Gandhi is pinning on the Reserve Bank of India to come out with a clear policy on peer-to-peer lending. “The model has huge potential to disrupt existing systems,” he says.

Click here to read at source:http://www.forbesindia.com/article/9th-anniversary-special/nine-startups-with-promise/50217/1