Falling short of cash for purchasing a laptop, washing machine or is there funds shortage for a family wedding or a medical emergency? There is help in hand from start-ups, CashCare and Lendbox, who could help you finance that mile.
While Lendbox helps you access loans of up to Rs 5 lakhs by helping connect the borrower to a slew of lenders, CashCare helps ease consumer purchases by facilitating conversion of the purchase amount into monthly instalments through a few clicks.
“We help in arranging finance where banks and other formal channels are not readily lending. These could include things like shortage of funds for a family wedding, medical emergency or debt consolidation including paying your credit card outstanding,” Bhuvan Rustagi, co-founder and COO, Lendbox, told FeMoney.
Rustagi said that Lendbox is a marketplace that connects borrowers and lenders. “We have nearly 5,500 users out of which 1800 are investors including senior executives and businessmen from whom those seeking money can borrow. The rest are borrowers. While we bridge the financing needs of the borrowers, we provide a good earning avenue for the investors with surplus cash to lend who get regular income through monthly instalment payments from borrowers,” he said. Lendbox has existing commitment of Rs 10 crore from investors.
The loans are at an average rate of 20-24 per cent per annum. “If someone clears credit card outstanding carrying annual rate of 30-32 per cent, there is substantial reduction in interest burden, Rustagi pointed out. While the rate of interest is negotiated between the lender and borrower with Lendbox which provides it suggestions gets a fee which could range between 2-6 per cent of the deal, with an average fee of around 4 per cent.
Lendbox has facilitated disbursal of Rs 2.75 crore loans since it started in November 2015. In the current fiscal, it expects to disburse Rs 1.5-2 crore a month, with 5,000 new monthly registrations including borrowers and lenders. The maximum repayment period for loans 36 months, with the average standing at 24 month or lower. Rustagi said that default risk is mitigated by checks prior to disbursal. “We have zero per cent NPAs. We do enough checks to make sure there is intent to pay,” he said.
CashCare, which started in February 2015, helps access small consumer loans with ranging from Rs 5,000 to Rs 2 Lakhs, with an average loan size of Rs 30,000. “We provide short-term lending solutions for consumer purchases which is difficult to get from lenders. Consumer lending, especially short-term personal loans is a problem. It is heavilty skewed towards credit cards,” Vishal Shekri, founder, CashCare told FeMoney.
The loan is provided by a finance companies with whom CashCare has tie up. “We have NBFCs at backend. They provide the lending. This could be for buying products such as television, washing machine or laptops. The purchases are converted into EMIs through a few clicks. The repayment period is between 3-12 months,” Shekari said. CashCare provides the option of interest-free loan where the reseller bears the burden or an interest rate option with a rate of 24 per cent per annum. The interest income goes to the NBFC while CashCare earns fee ranging between 1.5-2.5 per cent.
Since its launch in February 2015, CashCare, tied up with e-commerce retailers across industries, including ShopClues, FabFurnish, MakeMyTrip and ShopMonk.
The start-up at present has around 7,000 applicants, which it wants to scale up to 50,000 loans in 2016-17. 5. “There are talks for tie-ups with 5 large NBFCs. We also want to tie up with over 100 retailers during this financial year,” Shekri said.