While we were away …
Spice Digital, a subsidiary of Spice Mobility, has invested Rs 25 crore in peer-to-peer lending company AnyTimeLoan run by Luharia Technologies. The company says that it has disbursed loans worth Rs 47 crores. The company has an app on the Google Play Store and provides unsecured Personal loans, K12 Education loans (for primary & secondary school tuition fees) and MSME business loans.
AnyTimeLoan says that it can process a loan in less than a minute and that it does not require physical documents, collateral or a guarantor. It says that it will extend loans for amounts as small as Rs 1000 and will charge around 0.05% interest per day.
AnyTimeLoan requires users to sign in with their social media profiles and submit PAN card, address proof, proof of occupation and a bank statement. The company maps out a credit profile using 187 data points and takes 20% of the proceeds, leaving 80% to the lenders, as indicated by this Business Line report.
Note that AnyTimeLoan will be regulated by the Reserve Bank of India (RBI) as an NBFC. The RBI said that these companies will act as only as an online intermediary and not raise deposits. They will not be permitted to lend from its own books and will only act as a facilitator between different parties. Loans taken by a borrower at any point of time, across all P2P platforms, will be capped at Rs 10,00,000. Read more here.
Note that Spice Digital has a number of licences and it includes a wallet licence, Bharat Bill Payment System Operator, GST Suvidha Provider, and Aadhaar Enabled Payment System (AEPS) provider. The company did not mention if the data collected from these systems will be used to build a credit profile of users for AnyTimeLoan.
Remember that the RBI is looking to build a public credit registry (PCR) for individuals and companies. The PCR will build credit profiles using “reputation collateral” for first-time borrowers by keeping a track of their digital transactions. As such, Spice Digital is uniquely positioned to leverage the data produced by users for further loans.
However, there is increased concern about the invasive methods to collect information on users by these new lending companies.
At a pitch demo, today in Bangalore, the CEO of @loanmeet proudly claimed that their app secretly downloads all your contacts. That way if any of their borrowers fail to pay, they can call anyone in their contacts. This is a serious breach of privacy and is illegal.
— Brajeshwar (@brajeshwar) November 28, 2017
With such specific targeted data, care must be taken that the loans extended do not turn usurious for users.