Peer-to-peer lending marketplace Faircent has raised series B funding of $4 million from Belgium-based Incofin, Muthoot Fincorp, and existing investors, reports The Economic Times.

The company was founded in 2013 by Rajat Gandhi, Vinay Mathews, and Nitin Gupta. The lending platform provides both retail and business loans. The platform is essentially a marketplace which helps users to interact directly with fellow lenders, negotiate terms and conditions about interest rates, without any intervention from Faircent. The user should pay a minimal amount of listing fee to the company. The publication reports that the company will use the capital to strengthen its technology especially mobile, expand its geography, and marketing.

Previous Funding

In May 2016, it raised series A funding of undisclosed amount from JM Financial Products Ltd, $1.5 million from BCCL’s Brand Capital in August. In October 2015, Faircent secured an undisclosed funding from Mohandas Pai’s  Aarin Capital Partners. In June 2015, the company had raised $250,000 in its pre-series A funding round from Singapore-based M&S Partners. Before that in January same year, it raised $4 million from Fusion Microfinance’s promoters Devesh Sachdev and Ashish Tiwari.

Competition

 A lot of technology platform has joined the lending space off lately. Faircent competes with companies like Paytm-backed CreditMate, CASHe, LendingKart, MoneyTap, EasySalry, LoanMeet amongst others.

RBI guidelines on P2P lending

Note that, the Reserve Bank of India (RBI) had come out with final guidelines in October for peer-to-peer (P2P) lending platforms, according to which P2P lending companies will now be regulated as non-banking finance companies (NBFCs) and will come under the purview of the RBI.

According to the guidelines, the P2P platforms will act as only as an online intermediary and not raise deposits. These platforms will only act as a facilitator between different parties, and cannot provide any credit enhancement or credit guarantee. The RBI also directs that these companies cannot cross-sell other any product except for loan specific insurance products, and are not permitted international flow of funds. Also, the P2P lending platforms are supposed to undertake due diligence on the participants including credit assessment and risk profiling of the borrowers and disclose the same to their prospective lenders. They will also have to take prior and explicit consent of participants to access their credit information. The guidelines add that, the platforms will have to provide assistance in disbursement and repayments of loan amount and render services for recovery of loans originated on the platform.