Bhavin Patel is skillfully leading LenDenClub to tap the growing credit opportunities across India and Bharat:
The India P2P lending market is projected to reach $10.5 billion by 2026, according to the forecast for the Indian P2P Lending Market (2024-2030) report, which highlights a robust CAGR of 21.6% during the forecast period from 2021-2026. As of now, the industry size stands at around $8-8.5 billion. LenDenCLub has achieved a disbursement figure of $1.78 billion. It successfully served over 1 million merchants, representing a significant portion of the industry’s 3 million merchants.
LenDenClub has achieved CAGR of approximately 50% over the past 3 years. Bhavin says: “We generate a significant amount of business from the southern, northern, and western regions, showcasing our extensive national presence. We offer a variety of products tailored to meet diverse needs, including instant personal loans for salaried professionals, small-ticket loans for small businesses, and merchant loans specifically designed for small enterprises.”
Merchant Loans
The company has developed and scaled its merchant loan product in close collaboration with major payment companies. These loan product offerings cater to a wide spectrum of customers, enhancing the company’s ability to serve various segments effectively and drive continued growth. Bhavin shares: “NPAs at LenDenClub’s P2P lending platform stand at 3.05% as of August 2024. The figure has been stable over the past 24 months, which demonstrates the platform’s stability.”
Despite an increase in lending transactions between lenders and borrowers on the platform, the company’s overall figures have remained stable. As a peer-to-peer (P2P) lending platform, the company needs to conduct credit and risk profiling for borrowers. It has accomplished this by using 600 data points, which provide valuable insights for lenders to make informed decisions. “We periodically re-evaluate our KYC, data verification, and fraud monitoring processes to ensure that NPAs remain stable on the platform,” adds Bhavin.
RBI has announced the Unified Lending Interface (ULI) for all lenders, and LenDenClub is closely monitoring this development. Once this becomes available for integration, the company will consider adopting it, as it may help identify borrowers who are likely to default and enhance earnings for lenders.
Partnerships
LenDenClub has established strategic partnerships with all major credit bureaus, various data providers, multiple fraud detection services, securities service providers, and prominent tech companies like AWS, among others. Says Bhavin: “This collaboration allows us to offer one of the smoothest technology experiences to our users. Some of these technological solutions also help us manage delays and defaults by borrowers. As an entity registered with RBI, we publish a comprehensive list of all our partners on our website.”
TAT & Tech
LenDenClub platform is designed with a focus on efficiency and user experience, offering smart, lightweight, and fast applications for both lenders and borrowers. This ensures that users can seamlessly navigate the platform without any delays, enhancing overall satisfaction. The company has significantly streamlined the onboarding process, reducing TAT to make it quicker and more convenient for users to get started. Onboarding takes just 1.5 minutes for lenders and 4 minutes for borrowers, and the process is completely digital and secure.
Bhavin reveals: “The LenDenClub platform allows lenders to give loans starting from a few rupees to a few thousand rupees, offering a wide range for lenders. The platform is built on a microservices-based architecture, leveraging the best available technologies of the current times. Since July 2022, the platform has processed 2.35 billion transactions between lenders and borrowers.”
Underwriting, Detecting Fraud
LenDenClub has developed proprietary models that assess customer eligibility and risk appetite in real time, eliminating the need for salary proofs or bank statements. These advanced systems can underwrite over 97% of cases on the platform with no human intervention required. For the remaining cases, additional underwriting models are tailored specifically for both salaried and non-salaried segments.
The company has also employed sophisticated fraud detection models that can identify anomalies such as counterfeit bank statements, unusual banking transactions, and morphed faces in KYC documents.
Bhavin says that LenDenClub’s models can predict the likelihood of loan defaults before the EMI due dates and evaluate the probability of repayment for cases that miss their deadlines. By leveraging these technologies, it has strategically optimized both loan disbursement and collections, keeping NPA at around 3%.
Manual Lending Option
The company introduced the manual lending option last year, introducing a new level of control and transparency in P2P lending. This feature allows lenders to manually select borrowers based on key criteria, including demographics, financial status, and credit history. As a result, lenders can make informed decisions that align with their preferences and risk tolerance. With flexible loan tenures, pricing transparency, and clear matching policies, manual lending offers an excellent choice for those seeking greater control over lending strategies.
Personalization
In the past 12 months, LenDenClub has introduced new personalization features that empower users to take control of their lending decisions. This feature allows lenders to manually select borrowers based on their criteria, ensuring a tailored lending experience. Bhavin explains: “Users can lend as little as Rs250 to a specific borrower, with loan terms ranging from 1 to 9 months. This provides flexibility in managing their lending portfolio.”
These personalized lending capabilities were developed using advanced algorithms for borrower matching, designed to enhance user engagement and satisfaction.
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