Thursday, 31 December 2015

2016: A new year for Investors?

Researchers and Analysts believe that the year 2016 would be a good year for Investors

Predictions on the Dalal Street are soaring high, nothing unusual, as it is the equity research analysts who work with complex statistics, and interpret it in a relevant manner. They have been meaning to appeal to investors, to take it to the next level, at the onset of a new year.

The blockbuster year 2014, in which the Indian markets spiked to 30%, has raised the bar up for everyone with the brokerage predicting excess return in the year 2015. 

The analysis by major brokerage firms was mostly dependent on the government rolling out crucial reforms, policies which would aid the economic growth. A lot of researchers and trading firms stated the return on capital to be somewhere around 15-20% but at the year-end it has indeed plunged to 6%.
Earlier expectations of Sensex closing at 33000 at the year-end were established by Global brokerage firms, assuming big gains in the market. Investing majors such as Citibank along with HSBC, UBS had previously revised their targets citing dependencies on low inflation, high valuations and expectations from the government. While the revised targets were set close to 32000, which at the year-end closing, stands at 26117.

A statement from one of the leading financial services company, indicated 2016, as a positive year ahead for investors as 2015 turned out to be a down year. A similar market prediction has been made boasting of 15-20% return in the coming year, wherein the other experts project the economy to grow at a decent 8%.
In the Initial Public Offering (IPO), Investment Bankers have forecasted a raise of $5 billion in 2016. India's listed large and mid-cap companies are expected to post an average net income growth of 21.6 percent in the next fiscal year beginning in April, up from 9.2 percent in this fiscal, as per Thomson Reuters Starmine data.

Even though the benchmark equity index may recuperate from the losses and set a new record for the coming year depending upon low commodity prices, government reforms, low inflation and improving macro environment.

The focus, according to experts should be on individual stocks rather than benchmarks. A mix of large cap and midcap stocks can give good amount of returns based on the reports. However, analysts emphasise on picking the right stocks in a particular sector, focusing more on quality of management, growth rate, balance sheets and return ratios.

Wednesday, 30 December 2015

MSME Financing: Current situation and solving the problem with tech

The start-up ecosystem in India is maturing on count of big brands, coming out of the early stage MSMEs. However, despite a lot of start-ups having a well-defined business model and innovative products on their side, they fail to make it big or sustain their operations.

With the primary issue in any start-up being lack of adequate capital, financing for MSMEs remains as one of the challenges. Seed/ Angel funding or VC funding, is a viable option for those who are willing to dilute their stake at an early stage; however, it is common knowledge that not all of the SMEs are able to secure a funding.

Off late, financial institutions such as Banks and NBFCs are coming to the aid of MSMEs. But the problem is their stringent procedures, which should have been changed to appeal to the start-up.
The process for application of loan at a bank is tedious with the documentation, Collateral, legal formalities and requirements taking its toll on the entrepreneur.

The Government has launched two programs for investment and loans, targeted at MSMEs. Both of these programs are managed by SIDBI (Small Industries Development Bank of India).
Micro Units Development and Refinance Agency (MUDRA) under the scheme has already been implemented. Loans are provided between Rs 50,000 – Rs 10 Lakh to businesses. The categories of loan which are available for entrepreneurs are Shishu, Kishor and Tarun to signify the stage of growth and funding needs of the micro unit or entrepreneur.­

MSMEs in the financial technology (Fin Tech) have also come up with solutions by providing technological improvements in the entire loan process. Crowdfunding and Peer-to-Peer lending platforms are disbursing funds to small businesses. Lenders on these platforms are people who are looking get higher returns than the traditional investment options. Credit checks are performed, but there is no collateral and the process is a lot simpler than that of a traditional financial institution.
Employing almost 40% of the country’s workforce and contributing a major chunk of Industrial output, the problems faced by MSMEs cannot be ignored.

Tuesday, 29 December 2015

Working in Retirement or Saving?

Retirement: It's nice to get out of the rat race, but you have to learn to get along with less cheese. ~Gene Perret

You don’t need to be old to think about retirement, old age is inevitable, and so pondering over a financial support system during that period becomes necessary. In our early working years, we didn’t give a lot of thought towards this, probably because of our life being eccentric at that point and filled with pleasantries.

An easy answer given by a lot of people is saving, and some have said that they are comfortable working in their retirement period. But neither do the people who want to save money, anticipate that their planned savings are not sufficient nor does working in an old age turn out to be feasible.

For people with savings, unexpected situations keep rising, which deplete their savings - marriage of their children, home loans, medical urgency etc. There is no answer to the exact amount needed for retirement. But if you have to calculate this, there is just one equation which depends on the lifestyle that you will be leading during that time. Is it the same as your current lifestyle? Should it be lavish or mediocre? All this is governed by the money that is left with you, when you retire.

A lot of people cannot sit back idle at home, and among them some would prefer to work even past the retirement age. The perception is not wrong, but a certain element of reality would affect this. Firstly, at an age where a lot of functions of body are deteriorated, it becomes too much of a task to expect the unexpected. You are not as active as you used to be, neither are your reflexes. A lot of companies resort to lay-offs based on age as a criteria.

Different occupations bring different occupational hazards. For example – people working in blue collar jobs would find it hard at a certain age to work, because of the nature of physical exertion at their workplace which impacts the health. On the other hand, people in white collar jobs will comparatively find it easier to work.

Indian scenario

Economic and Social regulatory changes have put pressure on the retirement system in India, which currently has less than 6 percent of the entire population covered under private pension plans. Being classified under grade ‘D’, which is not a good grade in any ranking mechanism, there is no support for the poor and aged.

The concept of Joint families, which used to be fairly popular in the country, has been replaced with nuclear families. In a typical joint family, the elders used to be solely dependent on their family members for their needs.
With the advent of nuclear families, largely in the urban areas - there are more senior citizens who take care of themselves.


Between working in retirement and investing your savings, investing your savings is a better solution. Putting your money in PPF (Public Provident Fund), EPF (Employee’s provident fund) and Fixed Deposits might have seemed as a good option in 1995, but now there are plenty of options to get good returns. These are the most popular ones:

1.     Investing in Real Estate: Various strategies can be used to earn wealth in real estate. In one an investor flips the place by renovating it and selling it at a higher cost. In another, investors purchase the property, and intend to hold it for a longer duration.

2.     Investing in Stocks: Invest in a broadly classified portfolio of low-cost ETFs (exchange traded funds) and index funds.

3.     Invest in Peer-to-Peer lending: Ten years ago nobody had heard of Peer-to-Peer lending, and now this seems as a good option. Websites such as Rupaiya Exchange ( offer high rate of returns.

Monday, 28 December 2015

Why more and more people are routing for Peer-to-Peer Lending in India?

Growth of Peer-to-Peer lending
The Peer-to-Peer lending market in the west found its significance in the 2000’s, by then a lot of American population was still new to the term. It started with launch of Prosper, followed by Lending Club and soon other platforms came into play. The company’s offering later came under securities after coming under the Security and Exchange Commission’s ruling.

The regulations ensured the transparency in working of their business models, which also led to more people trusting the platforms with their money.

The two companies Prosper and Lending Club alone have serviced over 664,000 Loans amounting to $18 billion in total.

In the United Kingdom the first company to disburse loans in peer to peer model was Zopa which started in February 2005, and has serviced GBP 1 billion in loans. Other key players such as Funding Circle and Ratesetter have disbursed loans amounting to GBP 900 million and 870 million.

The peer to peer lending industry in India is unregulated currently, and the Reserve Bank of India has no plans to regulate this because of the current volume.

People in India are being drawn more towards Peer-to-Peer lending largely because of its ease of access and benefits. In a country where apart from Banks majority of the loans are facilitated offline by various channels and among peers.

The edge of the technological era has brought people more closer and organised information in ways which have defined the living of a modern man. The banks working in between, charge a higher interest rate, and have tedious processes and documentation, the peer to peer aspect gets loans to Borrowers with lower rate of interests and at the convenience of their home.

Borrowers from different professions having varying loan requirements, have their loans listed on Peer to Peer lending platforms. The lenders assess each borrower’s profile based on their loan grade and documents such as bank statements etc.
From a lender point of view this option offers better rate of interests on their savings compared to the traditional investment options such as Mutual Funds, Stocks, and Fixed Deposits.

In India a lot of companies have surfaced in the Peer-to-Peer lending domain as online marketplaces or communities to issue loans among peers.
Rupaiya Exchange is one such platform which has a credible base of borrowers. The company authenticates and does background checks on each loan request followed by a loan rating. It leverages social media to ensure a lower default rate among borrowers compared to other platforms.

Socially conscious platforms such as MicroGraam and RangDe which work in the non-profit sector have also drawn a lot of attention.         

With successful models of Peer to Peer lending being demonstrated around the world, the Indian customer is finding these online platforms as a convenient option for their finances. The trend for Peer-to-Peer lending is growing rapidly with more people gaining a positive experience from these platforms.


@RupaiyaExchange is a virtual market place for Peer to Peer Lending.
Rohan Hazrati (@HazratiRohan) is the Founder of #Rupaiya Exchange. He has worked across geographies and in his last assignment was the CFO of a multibillion dollar enterprise.

You can write to us ( visit the website ( or tweet us @RupaiyaExchange

Views are personal
#rupaiyaexchange #p2p #p2plending #loans #borrow #alternative financing

How safe is Peer-to-Peer Lending in India?

Investing in P2P Loans and understanding the market in India

Peer to Peer lending, has presented itself as an alternate investment option largely due to high yielding returns. With companies such as Prosper and Lending Club defining the P2P market in United States, this segment in India is dominated with online marketplaces which connect Borrowers with Lenders.

Rupaiya Exchange, i-Lend and Faircent are some of the leading websites which have established themselves in facilitating unsecured loans (Collateral Free).

As to the conventional investment options with limited return options, a lot of professional investors are turning towards P2P lending. Lending is done with more diligence, borrowers are given a grade rating based on the credit checks, and are cherry-picked for lenders, and assigned a risk.
Investors on the platform can earn interest rates upto 30 % on pieces of loans lent to peers.

Safety Fund
On Rupaiya Exchange, each lender has an option of diversifying his portfolio by spreading his risks across multiple loans and thus earn a fixed rate of return. The entire process on the platform is transparent for both a borrower and a lender. The advantage on the platform is lender protection fund which guarantees that a lender’s principal is safe at all times, an option which is unmatched by some of its competitors. Each loan which is fulfilled is insured from the point of view of an investor which makes this a lucrative way to earn interests on savings.

Borrowers can use the services on Rupaiya Exchange for any number of reasons, ranging from debt consolidation to medical needs. With borrowers getting the amount disbursed to them without much hassle and at a lower rate of interest than a bank, lending and borrowing is a safe bet for people across.

The lending experience on Rupaiya Exchange is close to a market analysis screen on a stock market, a screen which comprises of the loans lent to borrowers along with the payment schedule.

Earning safe and high returns on Rupaiya Exchange

1.      Diversify – The risks of a perspective lender can be split to a number of loans which ensures an average fixed return of 10%. This should be based on loan grade, loan type, loan duration and interest rate.

2.       Start slow – Get a better understanding on the market place and start by investing amount as low as Rs 1000.

3.      Due Diligence - Inspect all documentation from the borrower such as credit history and after checking the grade, risk assigned by Rupaiya Exchange.

Sunday, 20 December 2015

An Alternate Investment Asset

Today everyone understands the importance of financial planning. People these days are looking at multiplying returns on their investments to not only ensure that such returns beat inflation but also take them closer to the achievement of their goals. These goals short or long may include marriage, buying a house, child education or marriage, vacation or leading a happy retired life.

While there are multiple channels of investments ranging from gold to mutual funds, only a handful of people are exposed to an alternate asset class, Peer-to-Peer Lending (P2P lending).
Peer-to-peer lending is a debt based investment asset with returns going as high as 30%.

In simple terms, in P2P lending an investor (lender) invests in an unrelated individual (borrower) through a P2P lending platform.

So what are the benefits of investing on a P2P lending platform?

With P2P lending the following advantages exist which give one a higher flexibility and returns on investments by lenders:

   High Rate of returns

   Fixed monthly cash flows

   Curated list of pre verified borrowers

   Possibility of diversification among borrowers

   All operational activities with respect to liaison outsourced to the P2P lending platform

While the above objectives are very much prevalent on any P2P platform, on Rupaiya Exchange for example you have the following other unique benefits of investing:

   Safety of Capital through Lender Protection Fund

The biggest advantage of lending is that there is 100% principal protection at all times. Hence, while you earn higher interest returns, one is assured that the principal amount is protected.

   No Registration Fees or Investment fees

There is no registration fees to be paid by the lenders and there are no investment fees payable to use the platform. Whatever the rate of return you bid for comes to you directly without any payout to the platform.

   Flexibility in the amount to be invested

The investment amount starts from as low as Rs. 1,000 thereby giving flexibility in diversification and spreading of risks.

 Considering the above, P2P lending as an alternate asset class should make sense since not only does this offer higher returns, the cost of investments also decreases.

@RupaiyaExchange is a virtual market place for Peer-to-Peer Lending.
Rohan Hazrati (@HazratiRohan) is the Founder of Rupaiya Exchange. He has worked across geographies and in his last assignment was the CFO and Managing Director of a multibillion dollar enterprise.
You can write to us ( visit the website ( or tweet us @RupaiyaExchange

P2P Lending has risks and may affect your capital
Views are personal

#rupaiyaexchange #p2p #p2plending #loans #borrow #alternative financing #retirement #fintech #peer-to-peer lending

Tuesday, 8 December 2015

Strategy to enhance your return on P2P Lending platform

While Peer to Peer Lending (P2P lending) in itself provides an opportunity where in the rate of returns are significantly higher than the traditional financial instruments; lenders also have a chance to enhance their returns by following certain simple tools and methodology.

 1.    Diversify

The easiest tool is to diversify among lenders and increase your return. The more you diversify the chances of default goes down significantly. Take for example if you put Rs. 100,000 across 4 loans and if one of them defaults, your 25% of capital is eroded; however if this amount is spread across 10 borrowers and if one defaults only 10% is eroded which can easily be compensated (rather more than compensated) with the returns your earn from the balance 9 loans.

 2.    Reinvest your returns

One of the biggest advantage of P2P lending is that there is a fixed (monthly) return, in the form of interest, which you receive in your account. One should look at reinvesting this cash flow among other borrowers to ensure that there is compounding effect that occurs with respect to your investment. The biggest mistake lenders often do is to withdraw this amount.

3.    Increase your risk

While all lenders look at lending to Category A and B borrowers; one should not shy away in investing a certain amount of money in lower category borrowers. These borrowers present an opportunity to give you a higher rate of return. The way is to complete your diligence with respect to borrowers and start investing. Our experience across such profiles show that these are genuine and credible borrowers; however for one reason or the other get a lower rating.
4.    Use the filtering effectively

Rupaiya Exchange provides and effective filtering mechanism where in the loans can be filtered across category of borrowers, tenure, location etc. Use of such filtering in searching for loans can be effective in earning higher returns while minimizing the risks.

Following a correct strategy for investment and being regularly updated is the key to effective management of your investment on a P2P lending platform


 @RupaiyaExchange is a virtual market place for Peer to Peer Lending.

Rohan Hazrati (@HazratiRohan) is the Founder of Rupaiya Exchange. He has worked across geographies and in his last assignment was the CFO and Managing Director of a multibillion dollar enterprise.
You can write to us ( visit the website ( or tweet us @RupaiyaExchange

P2P Lending has risks and may affect your capital
Views are personal

#rupaiyaexchange #p2p #p2plending #loans #borrow #alternative financing #retirement #fintech

Sunday, 1 November 2015

Enhance your retirement income

In India, retirees generally depend on the following sources of income:

1. Pension – (if you belong to public sector)
      2. Rental income
      3. Income from savings (traditional financial instruments like FD, etc.)
      4. Stock returns/ dividends

If we look at points 1 to 3 of the above – in the long run none of these asset classes would be sufficient to meet the expenses due to the inflation rate. Further, reduction of the rates by the Central Bank is increasing the woes – with banks reducing the interest rates on the financial instruments.

In case of stocks, while the rate of return is higher than the inflation rate, the volatility associated to the same deters many retail individuals to stay away from this asset class.

Considering the above, peer to peer lending (P2P lending) provides an interesting alternate for the retail investors to look at. The rate of interest offered underP2P lending is considerably higher than the traditional asset classes and hence takes care of the inflationary pressures and lets one meet the expenses.

When compared to the stock market, the returns are comparable (and in some cases higher in the short term); however, P2P lending provides an advantage of recurring monthly fixed cash inflow and fixed return. Furthermore, such returns and the duration can be chosen by the lender and can be diversified by investing in small lots across multiple borrowers. This cash inflow can be withdrawn for regular use or reinvested in a set of borrowers to enhance the return to be earned.

This being said, like stock markets, P2P lending has its set of risks; however, these are aptly mitigated by some of the P2P lending platforms like Rupaiya Exchange to ensure relatively safe and fixed returns to individuals.

Hence, individuals looking to increase their rate of returns and not curb expenses or down grade their lifestyles during their retirement years can log on to P2P lending platforms and invest their surplus cash wisely.  

@RupaiyaExchange is a virtual market place for Peer to Peer Lending.

Rohan Hazrati (@HazratiRohan) is the Founder of Rupaiya Exchange. He has worked across geographies and in his last assignment was the CFO and Managing Director of a multibillion dollar enterprise.
You can write to us ( visit the website ( or tweet us @RupaiyaExchange

Views are personal
#rupaiyaexchange #p2p #p2plending #loans #borrow #alternative financing #retirement #fintech

Wednesday, 21 October 2015

Is P2P Lending for you?

A lot of discussion has happened on fintech in India and whether it can disrupt traditional financial institutions?

Fintech, in India, is at a very nascent stage and not many are privy to either the products offered or the benefits associated to them. And it is to be seen as complimenting the existing financial institutions rather than disrupting them. 

One of the products of fintech is Peer to Peer lending (P2P lending). This is in simple form is a mechanism where the borrowers connect with the lenders to fulfil their loan requirements. The virtual market place where they meet is called a P2P lending platform.

The role of the platform is to not only list the requirements and registers the borrowers and lenders, it also does the diligence on the borrowers. Some of the platforms like Rupaiya Exchange also assign an indicative credit rating to the borrowers based on the documents submitted, social profiling, and credit checks among others.

So what's in for the users to register and list the requirements? And why should someone lend money to such borrowers?

We take the case of both the borrowers and for the lenders and discuss its benefits


1. No collateral required: unlike a traditional loan, P2P loans are collateral free. Hence if you are just starting out in your career or a startup you need not worry on arranging a collateral (generally more that your loan requirement) for such as loans

2. Flexible amounts: the amount that has to be raised is flexible. For e.g. on Rupaiya Exchange one can borrow as low as Rs. 5000

3. Lowering of interest rates through Reverse auction process: it is not required to pay high interest rates on personal loans. Since the platforms act as a market place the lenders bid for loans this driving the interest rates down; thereby benefiting the borrower. A good credit rating borrower can attract lower interest rates thereby saving costs

4. Choose your own tenure: like the amount the tenure is flexible. One can borrow for as low as one month and repay the amount post that unlike some of the traditional financial institutions

5. No prepayment fee: again to ensure flexibility the repayment can be done at any point without any prepayment feed thereby saving costs

For lenders

1. Maximize returns/ better interest rates: typical rate of interest earned via such platforms is upwards of 15% and can touch upto 24% which post tax also is much higher than normal FDs and in some cases even stock market.

2. Diversification strategy: the lending provides an investment diversification option for the lenders and option for owning a new asset class

3. Credit checks: the lenders can conduct their own credit checks and ask questions from the borrowers via the platform; thereby not being dependent on any intermediary for conducting such checks. In addition, as mentioned above, some of the platforms also provide and assign credit ratings to the borrowers.

4. Choose your own investments: the lending platforms let you choose the borrowers and partly fund their requirement hence increasing the diversification and spreading the risks further.

5. Flexible amounts: the investment amounts are flexible. On platforms such as Rupaiya Exchange it starts from as low as Rs. 1000 and such amounts are to be paid only once the contracts are signed and the investor is comfortable with the entire arrangement. Hence it is not required to pre pay or deposit an account before actual investments

6. Monthly repayments and fixed cash flows: the repayment of the amounts along with interest is done on a monthly basis and such repayments are monitored on regular basis thus ensuring regular flow of income.

In global context, P2P lending is not new with players like Funding Circle, Lending Club, Zopa etc. already established in their respective geographies and credited for facilitating disbursement of millions of dollars on a yearly basis and some of them being listed on stock exchanges also.

Of course like in any other investments, there is a risk associated to default, however with prudence and adequate diversification such risk can be covered if not mitigated to a 100%.

Considering the pros of P2P lending it's about time when it is adopted by both lenders and borrowers here in India.


@RupaiyaExchange is a virtual market place for Peer to Peer Lending.
Rohan Hazrati (@HazratiRohan) is the Founder of #Rupaiya Exchange. He has worked across geographies and in his last assignment was the CFO of a multibillion dollar enterprise.

You can write to us ( visit the website ( or tweet us @RupaiyaExchange

Views are personal
#rupaiyaexchange #p2p #p2plending #loans #borrow #alternative financing

Sunday, 18 October 2015

P2P Lending – An Opportunity for the Common Man!

Mr. Talwar*, aged 57, is heading an NGO in Kolkata. The NGO has been established to serve juvenile delinquents and mentally challenged. Prior to this, Mr. Talwar was heading the Administrative Department of an MNC.

Today Mr. Talwar is looking for a personal loan of Rs. 5 Lacs for his daughter’s wedding. Given his credentials and his professional career, Rs 5Lacs loan should not be an issue. However, there is one concern: Mr. Talwar is employed as a contractor/professional with the NGO and hence does not have salary slips to prove his income.
Since his salary slips are missing, no bank is ready to lend money to Mr. Talwar. While some NBFCs are ready to work with him, the interest costs are high, discouraging him to enter into a contract with these institutions.

Mr. Talwar while browsing through the internet refers to a P2P platform, and registers himself as a borrower. Few questions from the Rupaiya Exchange team, due diligence of his documents and after a personalized phone call, Mr. Talwar is successfully approved as a Borrower on the platform.
This is a true story.

The above depicts the power of P2P lending, which helps professionals like Mr. Talwar break barriers created by typical financial institutions and a ‘checklist’ driven approach adopted by them.
P2P Lending platforms are a reality and represent an Alternative Financing opportunity. This is an inclusive initiative for people with a sound track record, but are marred by the unavailability of one or more of ‘important documents’ or a ‘low credit’ score to qualify for the ‘right’ borrower.

The P2P lending platforms devise their own approach (Rupaiya Exchange has a detailed in house credit check mechanism as well) to check the credentials of the proposed borrower and give them alternate ratings. Not to say that the P2P platforms do not reject borrowers or loan application; rejections do happen, however these are in cases where there are serious flaws in the credentials of the proposed borrower or loan listings and such reasons are explained to the borrowers in detail.
The P2P lending scenario is already dominating the US and Europe economies with large players like Lending Club, Prosper, Zopa etc. established and flourishing and touching the lives of common individuals.

In India, P2P lending is at a very nascent stage but with the right momentum and ability to solve problems of the common man, like Mr. Talwar, it has a huge opportunity to grow.
*Names have been changed
@RupaiyaExchange is a virtual market place for Peer to Peer Lending.

Rohan Hazrati (@HazratiRohan) is the Founder of #Rupaiya Exchange. He has worked across geographies and in his last assignment was the CFO of a multibillion dollar enterprise.
You can write to us ( visit the website ( or tweet us @RupaiyaExchange

Views are personal
#rupaiyaexchange #p2p #p2plending #loans #borrow #alternative financing