Business News›Startups›P2P lending firm ​i2ifunding launches protection fund for retail investors
P2P lending firm ​i2ifunding launches protection fund for retail investors
Shashwati Shankar
, ET Bureau Last Updated: Aug 18, 2016, 03:58 PM IST
i2ifunding plans to set aside 5% of the disbursed loans for this fund as a security measure for investors
Venture catalysts backed peer-to-peer firm i2ifunding has launched a principal protection fund for retail investors. It plans to set aside 5% of the disbursed loans for this fund as a security measure for investors.
"The biggest concern that a retail investor has is that he should not loose the principal that he is investing even if there is some reduction in the return. One can never be 100% sure about the minimal number of defaults that an investor may face, so this move acts as a protection measure," said Vaibhav Pandey, cofounder of i2ifunding.
The loan processing fee charged to the borrowers ranges between 3% and 8% and the investors are charged 1% as fund management.
The platform defines a risk category for every borrower on its platform. These categories are from A to F, where A is the safest and F the riskiest.
The extent of principal protection depends on the risk category of the borrower. While 100% principal protection applies to risk category A, category F has a 50% protection.
"So far we have experienced only one default case where the borrower failed to pay for a period of three months, but then shortly after that payment was made we didn't need to use the fund till now. It's a measure that will instill a certain amount of confidence in retail investors," said Pandey.
investorsVaibhav Pandeyi2iFunding