In the time of the pandemic, online social financing is gaining momentum. As per CMIE’s Consumer Pyramids Household Survey (CPHS) 2020, 77 per cent of urban Indian households reach out to family, friends and acquaintances in times of need. There was a 100% increase in the last year (2019-2020) in the number of urban households borrowing from family and friends. SaveIN, an online platform, is trying to bank on this by catering to those Indians who lend and borrow money among each other.
SaveIN aims to help organise the large market of transactions amongst friends, family and acquaintances facilitating discovery, matchmaking and record keeping of such transactions. In an e-mail interaction with FE Online, Jitin Bhasin, Founder and CEO, SAVEIN, explains more about this platform and the benefits it provides to both lenders and borrowers. Excerpts:
What is the need of an online platform like SaveIN to borrow money from friends and family when one can do that directly through net-banking, UPI?
Jitin Bhasin: Nearly 80% of India’s working population is deprived of access to formal/institutional credit and hence lending/borrowing amongst friends, family, shopkeepers, business partners, office colleagues etc becomes a go-to form of finance for most Indians. While such transactions are carried out through cash/bank transfers/UPI, there are associated challenges like:
– Limited number of contacts to lend/borrow: People are unaware of the potential of their social network and end up lending/borrowing money among a very small set of people. SaveIN lets people discover hundreds of lenders/borrowers by leveraging the power of their own social network.
– Ability to charge interest: Lenders find it difficult/embarrassing to ‘ask’ for interest while lending money to borrowers in their circle. Likewise, borrowers don’t know the right/transparent interest terms that they should pay to borrow with dignity. SaveIN, allows lenders to clearly define their desired interest rate while creating their lending profiles. This in turn is clearly displayed to borrowers, while approaching lenders for loans through the SaveIN platform, thereby addressing this core problem for both parties.
– Record keeping: if transactions are carried out in cash, there is no associated record. Even in bank transfers/UPI, the transaction is recorded as a mere ‘payment’ and not a ‘loan’ from a person A to B. Hence there is no scope for defining ‘loan’ terms/charging interest, computing repayment amount, monitoring loan repayment schedule etc. The absence of records lead to lenders/borrowers forgetting to pay/collect money on the due date and hence this increases friction in their relationship.
SaveIN maintains all records in a completely digital manner, thereby recording everything from borrow request, lender decision, issuance of loan, repayment schedule and associated records of repayment up to the closure of loan. It is noteworthy that all payments through SaveIN platform are digital in nature, avoiding the need for use of cash
– Repayment woes: it is observed that lenders have to ‘chase’ borrowers for repayment since there is no official record/ method to facilitate repayment. Given the absence of record of such informal transactions, there is no penalty for the borrower to default
SaveIN sends automatic notifications and reminders to both lenders and borrowers, reminding them of due repayments, thereby enabling disciplined and responsible lending/borrowing through the use of SaveIN platform. Both lenders and borrowers also get to assign ratings to each other, thereby allowing both parties to record their experience. This rating of a lender/borrower is immensely useful for identifying disciplined and compliant lenders/borrowers on the SaveIN platform.
As evident, SaveIN is digitizing this large market of informal loans and addressing key pain points as experienced by lenders/borrowers while transacting with each other
SaveIN is neither a bank nor a NBFC regulated by RBI. How does this platform addresses safety concerns of both lenders and borrowers?
Jitin Bhasin: SaveIN is a fintech platform that has created a proprietary technology product which facilitates discovery, matchmaking, record keeping and payments for informal loans among willing participants in a social circle. All payments are made by users through the use of their existing bank accounts, through UPI where the control and responsibility to approve any payment/money transfer lies solely with the user. SaveIN cannot carry out any transaction without the express consent of the user. It is noteworthy that SaveIN has tied up with leading payment gateways and hence is providing a payment experience that is at par with any other fintech/e-commerce/consumer business when it comes to payments/money transfer. SaveIN follows a completely consent driven, secure architecture; all customer information is encrypted using 256 bit-Advanced Encryption Standard.
It is therefore evident that SaveIN is conforming to the highest degree of safety while enabling customers to use the platform.
What are the charges SaveIN deducts when someone lends or borrow money on SavIn platform?
Jitin Bhasin: As a platform, SaveIN reserves the right to charge its users a usage fee/convenience fee. However, at present, SaveIN is not charging users any fee for using the platform, thereby enabling more and more Indians to start using the platform for informal loan transactions
How much business have you done?
Jitin Bhasin: SaveIN app was launched in mid April 2021 and since has been downloaded by more than 50,000 users on the Google Playstore. We have more than 3000 registered lenders on the platform, and several users are already transacting on SaveIN for their informal loans. The platform has been rated by nearly 700 people on Google Playstore with lifetime rating of 4+, thereby reflecting that users are appreciating the overall experience of SaveIN.
Can one earn money by lending on SaveIN platform? Who can borrow money from me on SaveIn?
Jitin Bhasin: Yes, a lender can set preferred interest rate (0%-36% p.a.) while lending money to people in his/her own network. For a loan to be recorded on the platform, the loan conditions must be agreed between a lender/borrower. SaveIN connects lenders and borrowers in their own social networks, which implies that a lender will never receive requests from unknown people.