Will offer the lowest-ever interest rates on unsecured Personal Loans for borrowers to avail affordable credit following the hike in bank lending rates

Faircent.com, India’s leading NBFC-P2P and largest P2P lending platform, has announced a reduction in the interest rate on unsecured loans to 9.99% per annum for prime borrowers listed on its platform. The move is a first for India’s lending market, with such an interest rate being the lowest for unsecured loan offered by any private/PSU bank or alternative lending platform in the country, so far. This is the direct result of RBI regulating the peer-to-peer lending sector in India and recognizing it as an NBFC-P2P, thereby unlocking the alternative credit supply into the economy. 

In a bid to keep the rising inflation in check, the Reserve Bank of India (RBI) announced a hike in the repo rate in August 2018, from 6.25% to 6.50%, impacting both existing as well as future borrowers taking loans from banks. With the hike already in effect, several public sector and private banks have increased their Marginal Cost-based Lending Rates (MCLR), with borrowers having to pay higher interest rates and EMIs on their loans going ahead. However, the slashing of rates for unsecured loan to as low as 9.99% p.a by Faircent.com, may have an impact on the lending sector by putting downward pressure on lending rates and will help consumers and small businesses access funds at a much lower cost to meet their credit requirements.

Commenting on the announcement, Vinay Mathews, Founder & COO – Faircent.com said, “Faircent.com was the first P2P Lending platform to be certified as an NBFC-P2P by RBI in May this year, enabling increased credit supply on the platform that helped us bring down lending rates. In view of the latest increase in bank lending rates, alternative credit segments like P2P lending can be expected to play an integral role in helping boost the supply of credit in the economy and facilitate affordable credit in a highly transparent manner. We are confident that by reducing unsecured loan rates to 9.99% p.a, Faircent.com will have far-reaching impact on the Indian lending eco-system.”

The availability of loans at as low an interest rate of 9.99% may, subsequently, not only prompt other alternative lenders in the country to bring their respective interest rates down, but also have an impact on loan pricing decisions in the formal banking sector as well. On the other hand, the reluctance by banks and lenders to pass on the benefits of falling rates to consumers during relaxations in monetary policy is a factor that is increasingly contributing to both new as well as repeat borrowers switching to alternative lending products such as online peer-to-peer lending, in order to meet their demands for finance.

In May 2018, Faircent.com became India’s first P2P lending platform to receive the Certificate of Registration (CoR) as an NBFC-P2P from the RBI. Early this year, it became the first NBFC-P2P to open its API platform to developers and recently, also integrated UPI with its payment gateway on the platform’s Lender dashboard, providing yet another layer of convenience to investors when transacting on the platform.