It’s reported that the Indian fintech company BharatPe are set to foray their operations into the consumer space with the launch of its first-of-its-kind consumer product – 12% Club.
Currently available on both the Google Play Store and the Apple App Store, consumers will be able to utilise the 12% Club app to either borrow or invest finances. When borrowing, consumers will benefit from a competitive interest rate of 12%, whilst the investment opportunity will provide consumers with the option to invest and earn up to 12% annual interest – hence the name of the product.
BharatPe has partnered with Reserve Bank of India-approved NBFCs to develop and launch their new offering. NBFCs – otherwise known as non-bank financial institutions – are entities that are capable of offering certain bank-like services without holding an official banking license.
The consumers on the 12% Club app can invest their savings anytime by choosing to lend money through BharatPe’s partner P2P NBFCs. Additionally, consumers can avail collateral-free loans of up to Rs. 10 lacs on the 12% Club app for a tenure of 3 months; which incur no processing or pre-payment charges.
The loan eligibility will be defined based on a number of factors including the consumer’s credit score, the shopping history using PAYBACK loyalty system, or the payments completed via BharatPe QR.
BharatPe recently acquired PAYBACK India and its 100 million+ active members from American Express and ICICI Investments Strategic Fund in June of this year.
Consumers investing via the 12% Club app can put in a request to withdraw their investment anytime, partially or completely, without any withdrawal charges. They can start their investment journey by investing as low as Rs. 1000 and enjoy daily credit of interest. The upper limit for investment by an individual is currently set at Rs. 10 lacs and is expected to increase to Rs 50 lac over the coming months.
The company is hoping to achieve investment assets under management (AUM) of $100 million and a lending AUM of $50 million from this product, by the end of the current fiscal.
Commenting on the launch, Suhail Sameer, Chief Executive Officer of BharatPe said, “As we begin our journey on the consumer side, our focus will be to launch products that are industry-shaping, 100% digital, and easy to use. This one-of-its-kind product for consumers has been designed to ensure industry-best benefits both for lenders, as well as borrowers.
“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 $5 million of monthly investment run rate and $1 million of monthly borrowing run rate. We are confident that this product will be well received in the market and will play a key role in driving financial inclusion in the country. This is just the beginning and we will be adding new customer products during the rest of the financial year.”
Suhail added, “BharatPe’s P2P lending product for merchants has been one of our industry-defining products with Gross Investments of close to $700 million done by over 6.3 lac 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 lac merchant partners”