Online peer-to-peer lending platform LenDen Club has raised $500,000 from an undisclosed Mumbai-based venture capital fund, a company statement said.
Existing investors Venture Catalyst and Anirudh Damani-founded Artha India Ventures also participated in the round. The company will use the fresh capital to enhance its product platform and improve tech automation, the statement added.
In April 2016, LenDen Club had raised an undisclosed amount in seed round from Venture Catalysts and Anirudh Damani.
“The P2P lending model in India not only presents a great opportunity, but will also facilitate access to capital and financial inclusion for segments of our population, which fall outside of the purview of the traditional BFSI segment.
This is an exciting space, and we want to be there with LenDenClub while P2P lending grows in India,” Damani said.
The funding will also help the firm achieve the minimum capital requirement of Rs 2 crore for registration as set by the Reserve Bank of India in its recent directive on P2P lending.
Earlier this month, the RBI issued directions to govern the workings of non-banking financial companies (NBFCs) engaged in P2P lending. While the new regulation gives a new lease of life to P2P lending startups, most stakeholders feel the guidelines leave a lot to be desired as far as putting the sector on the growth path is concerned. The minimum capital requirement is seen as one of the major challenges for startups registering themselves in the space.
LenDen Club, run by Innofin Solutions Pvt Ltd, was founded by Dipesh Karki (chief technology officer) and Bhavin Patel (chief executive) in 2014. The platform connects lenders looking for high returns with creditworthy borrowers looking for personal loans up to 24 months. It approves loans after an 18-hour time gap upon request and disburses loans in three days. The company claims to have arranged and completed loan transactions worth Rs 17 crore on its platform with an average return rate of 25%.
Currently, the company said it has over 8,000 borrowers from Mumbai and Pune and 2,800 lenders from all over India, including non-resident Indians.
“We have the unique capability to assess borrowers who may or may not have a digital footprint and social media presence. After seeing the rapid growth and adoption of our platform in last 2-3 quarters by borrowers and lenders alike, we have set ambitious targets for disbursals in the coming months. This investment will help us achieve those goals and further enhance our platform," Patel said.