Mumbai-based fintech startup RupeeCircle has raised ₹4 crores ($588,000) from non-banking finance company Mahindra Finance, as reported by a top executive from the startup. Mahindra Finance will have a 13% shareholding in the startup, according to the regulatory filings.
RupeeCircle, a fintech startup provides an online lending platform for borrowers to get quality credit at attractive interest rates, along with providing favorable returns for its lenders using the data-driven technology to minimize risks. It was founded by Ajit Kumar, Abhishek Gandhi, Ashish Mehta, and Piyush Saurabh in 2018.
It has also applied for a P2P license from the RBI, as told by Ajit Kumar, Founder, and CEO, RupeeCircle.
RBI had issued norms for peer-to-peer startups in the country last year in October. According to the norms, such firms will come under the non-banking finance companies. These firms need to obtain an NBFC-P2P license to operate and have a net fund worth not less than ₹2 crores or as specified by the RBI, and they can only operate as intermediaries between the lenders and the borrowers.
RBI has capped the exposure of a lender at ₹10 lakhs, along with capping the exposure to a single borrower to ₹10 lakhs as well. A lender cannot lend more than ₹50,000 to a single borrower, and the maturity of the loans are not to exceed more than 36 months.
There is a huge scope of P2P industry in the Indian market with many SMEs and individual borrowers remaining outside the ambit of banking credit. P2P opens the space for these lenders to avail quality loans with affordable interest rates.
There are many fintech startups catering to the borrowers, a few among them in the P2P sector include Delhi-based Faircent, Delhi-based Peerlend.in, Mumbai-based Finzy, Bengaluru-based Cashkumar, Monexo Fintech, BigWin Infotech, along with OML Technologies, among many others.
In a related development, India’s homegrown e-commerce giant Flipkart is also looking to venture into digital lending, having applied for an NBFC license.