Peer-to-peer lending is the new disruption in the financial services landscape
The idea for peer-to-peer lending is to help borrowers save money in the long run and help lenders make more profits — more than what they would earn in a bank.
P2P lending offers the advantage of fixed and higher returns not vulnerable to market turbulence, and that’s where it is winning over traditional market-linked investment instruments. Faircent.com, for example, has consistently delivered net returns upwards of 18% per annum to its majority of lenders. Another aspect, which appeals to Indian lenders, is the fact that such platforms offer flexible liquidity to investors without a full-fledged long-term or short-term lock-in period. Investments facilitated through online P2P lending platforms also start generating returns from the following month in the form of EMIs, which can then be used by investors to further diversify their portfolio.
Online P2P lending platforms is evolving into a viable and highly profitable alternative asset class and competing with mutual funds and equity, expected to appropriate nearly 15-20% of the investment portfolio of investors in the next few years.
Future is SMEs & MSME Financing
The huge business potential in MSME financing has led to rapid growth for the online P2P lending domain. These fintech companies are improving access to finance for SMEs by facilitating loans and reducing costs by connecting them to individual lenders, banks and financial institutions.By leveraging technologies and the ubiquity of smartphones, online P2P lending companies are targeting the large underserved segment of SME financing, enabling small businesses to benefit from the slew of innovative and convenient credit products. MSME borrowers can apply for loans online within a few minutes, select their preferred repayment terms and receive funds in their bank accounts within 2-3 days.
Niyogin Fintech raising $36 mn from Ward Ferry, Sabre Capital and others
Niyogin Fintech Ltd, formerly known as M3 Global Finance Ltd, is raising Rs 235 crore ($36 million) via a preferential issue of shares to investors such as Hong Kong-based investment firm Ward Ferry and Sabre Capital, Lucky Investment Managers Pvt. Ltd, Alchemy Capital Management Pvt. Ltd and Alchemy India Long Term Fund Ltd are among the other investors, the Mumbai-based non-banking financial company said in a statement.
The company said it is issuing the shares at Rs 50 apiece. That’s nearly triple the Rs 17.35 price at which its shares traded on the BSE on Tuesday.
The company’s shares are traded under the capital markets regulator Securities and Exchange Board of India’s periodic call auction norms for illiquid stocks.
The preferential shares will constitute more than 50% of the fully diluted capital of the company. After the transaction, Niyogin’s promoters will hold less than 40% stake in the company on a fully diluted basis.
Its promoters—Amit Rajpal and Gaurav Patnakar—had acquired the company late last year. Rajpal is a partner and portfolio manager at hedge fund Marshall Wace in the Hong Kong office. Patnakar worked with The Boston Company Asset Management in New York until 2016 and is a freelance consultant now.
Since acquiring the company, they have infused about Rs 40 crore through an issue of convertible securities to promoters and non-promoters, revamped the board of directors and tied up with technology providers, Niyogin said.
Rajpal, the company’s chairman, said that Niyogin is being “re-tooled” as a new-age NBFC which will use technology to reach out to relatively less penetrated parts of the country. The company will focus on micro, small and medium enterprises, which remain underserved in terms of availability of credit and other financial products. The company is also planing to integrate with a pan-India network of partners for distribution and monitoring of credit.
Equirus Capital acted as the sole financial adviser on the transaction.
Niyogin joins a bunch of fintech firms such as InCred Finance, FlexiLoans, SMECorner and LendingKart in raising capital in recent months.
Ashish Kacholia invested 6 Cr thru Lucky Investment Managers Pvt. Ltd
RJ promoted Alchemy Capital Management Pvt. Ltd holds stake in this company
Akash Prakash is a Director and the Chief Executive Officer of Amansa Capital Pte. Ltd.
Samir Shah – Managing Principal at Sattva Capital
Samir Shah has had a career in global financial markets in Hong Kong and New York for over 25 years, with firms such as Goldman Sachs and Salomon Brothers prior to managing an investment fund (Sattva) in Hong Kong. He is currently involved with several early-stage companies and venture funds as an investor, Board observer and/or Investment Committee member. He is a founder member of Venture Catalysts, is on the Investment Committee of CIIE, and is also a Venture Partner with CIIE. His interests and investments span a board range of sectors with special focus on renewable energy, technology, agriculture, and water. He is on the Board of Waaree Energies Limited, a leading solar panel manufacturer in India. He also advises global funds on India investments. He is trained as a lawyer, Chartered Accountant and an MBA (Wharton).
Directors of M3 Global Finance Limited are Sucheta Pandurang Dalal, Makarand Ram Patankar, Kapil Kapoor, Ravindra Kumar Agarwal, Manish Arvindlal Shah, Sutapa Banerjee, Mitul Niranjan Shah, Amit Vijay Rajpal, Dhvani Hareshbhai Contractor
Amit Rajpal – Non Executive Chairman & Co-Founder
Amit Rajpal is an expert in the area of financial services investing and research globally. He is currently CEO of Marshall Wace Asia, a leading hedge fund manager in the equites space with a growing P2P franchise .Prior to that Amit worked at Morgan Stanley for 11 years working in FIG research group leading the consistently highly ranked Asian banks research franchise and was also responsible for leading the Global Banks Research team. Completed his MBA (equivalent) from IIM Calcutta, he is also qualified Cost and Works Accountant (ICWA) and completed his B.Com from University of Mumbai.
Makarand Patankar – Promoter Director
With over 32 years of multinational experience in Strategic and Financial roles within industry verticals such as Financial Services, Pharmaceutical, Healthcare, Retail and Network Management, Mr.Patankar facilitates the alignment of the strategic vision, business expansion and delivery mechanisms for the company. Over the years, Mr.Patankar has structured and successfully executed several IPO, EOU-Buy-Backs, Carve-out M&A’s and other deals. Amongst one of the most respected thought leaders in the area of financial logistics in India, Mr.Patankar leads several community programs and philanthropic initiatives. Prior to founding the Pioneer Group & 3i, Mr.Patankar was a senior executive with several multinational and Indian conglomerates including Glaxo, TATA & TNT.
Gaurav Patankar – Co-Founder
Gaurav Patankar is a private investor focused on taking an engaged ownership approach across public and private investments. Over his 18 year career, Gaurav has invested across emerging and developed markets and most recently served as Managing Director and Portfolio Manager at The Boston Company Asset Management (A BNY Mellon company) focused on Emerging Market Conviction Investing and orchestrated a turnaround of the emerging market investment portfolios in addition to leading key strategic dialogues with institutional clients of the firm. Prior to this, Mr.Patankar was a Portfolio manager of Global absolute-return strategies including Emerging-market strategies at Lockheed Martin Investment Management Co (LMIMCo) where he successfully turned around the firm’s alternative portfolio and built out the firm’s managed account platform for the DB and DC side. Mr.Patankar holds Bachelor’s degree in Electronics and Telecommunications Engineering, an M.B.A. in Finance and Strategy and a Ph.D. in Social and Political Sciences. He was awarded the 2005/2006/2007 team-award for All America Bank Research team by Institutional Investor, was named a 2011 Rising Star in hedge funds by Institutional Investor.
Kapil Kapoor – Independent Director
Kapil started his professional career in 1987 with Nestle India Limited. He was also a part of the management team of Bausch & Lomb serving in Russia, Ukraine, East Africa, SAARC region, subsequently re-located to Thailand on becoming the Country Manager of Bosch & Lomb and subsequently got promoted as the commercial director in 1998 with regional responsibility for South East Asia.He served as the Chairman and Non-Executive Director of Info Edge (India) Limited, on the Board of Trustees of the International Foundation for Research and Education (Ashoka University).He also held the position of Global Chief Operating Officer for Timex Group USA, Inc. from Oct 2009 until May 2013 and various other positions within the Timex Group between 2000 and 2009 such as Managing Director, Chairman, Senior Vice President of the Asia-Pacific Region.
Sutapa Banerjee – Independent Director
Sutapa has close to 24 years in the financial services industry across 2 large multinational banks (ANZ Grindlays and ABN AMRO), and a boutique Indian Investment bank (Ambit) where she built and headed several businesses.A well-recognized thought leader in the Wealth Management space having headed and successfully built from scratch the Private Wealth businesses in both ABN AMRO Bank and Ambit Capital, Sutapa was voted one of the ‘Top 20 Global Rising Stars of Wealth Management’ by the Institutional Investor Group in 2007 – the only Indian and one of only two winners from Asia.As CEO she led Ambit Private Wealth to ‘Best Private Bank in India in the 2013 AsiaMoney polls. In 2012 she was shortlisted in the 50 most Powerful Women by Fortune India. Sutapa is an Advanced Leadership Fellow (2015) of Harvard University. Currently she consults in the Wealth and Investments Management area and serves as an Independent Director on several boards of companies (JSW Group, IL&FS Group) and non-profits (Oxfam India and Dignity Foundation). She also represents Women’s World Banking as a Nominee Director on the board of their investee company Ananya Finance in India. Her area of study at Harvard was Responsible Investing and Business Practices and the use of a Gender Lens. She currently works, writes and speaks actively in this space.
Sucheta Dalal – Independent Director
Sucheta is considered one of the best known names in investigative journalism. She was awarded the Padma Shri by the Government of India in 2006 for her outstanding investigative journalism spanning over 2 decades including exposing the Harshad Mehta scam in 1992.In 1993, she was awarded the Chameli Devi Award for outstanding journalism as well as Femina’s Woman of Substance Award after breaking the Harshad Mehta scam story. Sucheta has worked with some of India’s leading newspapers. She was the financial editor of The Times of India and Consulting Editor with Indian Express and Financial Express. She has also worked with The Economic Times and Business Standard.She has served as a member of the NR Narayana Murthy committee on Corporate Governance in 2003, and a member of the primary market advisory committee of the SEBI. She also takes active interest in consumer and investor related issues and has been a member of the Investor Protection and Education Fund set up by the Government of India under the Department of Company Affairs.She currently directs the socially-oriented reporting at Moneylife, the Foundation’s activities and grievance redressal activities.