FAIRCENT Investment Thesis

Faircent is India's first peer-to-peer (P2P) lending platform to receive a Certificate of Registration (CoR) as an NBFC-P2P from the Reserve Bank of India (RBI). The company’s mission is to provide a marketplace that connects individuals in need for credit with individuals and institutes willing to lend their access funds. It uses technology to speed up the process and cut costs. Thus, Faircent provides an opportunity to the borrowers to get their requirements funded at viable rates and help lenders get the best possible return on their investment.

Faircent provides a virtual marketplace where borrowers and lenders can interact directly, without having to go through the traditional financial intermediaries like banks. India has 190 million of unbanked population, and a large underbanked population. The lack of credit history of unbanked or underbanked population gives them limited access to loans. Evidence from a variety of studies suggests that growing access to financial instruments has a positive impact on self-employment, business activities and household consumption. Access to microcredit also leads to a general increase in consumption levels as it lowers the need for precautionary savings. Companies like Faircent help solve this problem and accelerate financial inclusion to individuals and SMBs. Faircent’s deep penetration in tier 2 and 3 cities India and its fast growth rate show the strong demand.

The product benefits both lenders and borrowers as Faircent has a stringent verification process to ensure that borrowers can repay the loan. Lenders’ money is allocated to a diversified portfolio of borrowers to mitigate the risk. For borrowers, Faircent offers a variety of loans to meet their needs, ranging from home mortgages to business funding.

An automated system suggests the loan period, loan amount and interest rate against each Borrower’s profile, which is indicative of the Borrower’s capability to efficiently repay the loan. Lenders can make offers to fund borrower’s requirement which are accepted on first come first serve basis. Both borrowers and lenders can strike deals with multiple members. Thus, lenders can fund a portion of the total loan requirement of multiple borrowers and borrowers can seek to raise money from multiple lenders. 

Faircent was founded by Rajat Gandhi and Vinay Mathews – both of whom have had over 15 years experience, launching and building portals, digital advertising and enterprise sales, most recently with Times of India. The company has a diverse international investor base and has received interest to expand the platform in Southeast Asia. It currently operates only in India from its headquarters in Gurgaon.