The “Fixed Maturity Peer-to-Peer Plan” (FMPP) was launched today in Rajasthan by LenDenClub, the largest P2P lending platform in India. A minimum investment of 10,000 is required to participate in FMPP, a term-based P2P plan that offers investors stabilised high returns of up to 10-12% per year. By the end of FY 23, the business hopes to treble the number of investors it now has in Rajasthan.
An investment amount is hyper-diversified into a large pool of borrowers by LenDenClub, an RBI-approved NBFC-P2P that services more than 20 lakh investors. As a result, the default rate is significantly reduced, providing investors with profits that are risk-mitigated. Because they have been improved upon and trained on exclusive first-party data collected by the company since its beginning, the new AI and ML-based algorithms are more effective than those that came before them. Due to this, FMPP is able to offer hyper-diversification, a special characteristic that reduces risk and provides return stability.
LenDenClub examined investor data in Rajasthan before releasing the product to get understanding of their investment practises. When compared to the first half of the calendar year 2021, investments increased four times, while the number of investors increased by nearly 100%. In the six months following December 2021, the average investment climbed by more than 10x, 4x, and 4.5x for the age groups of 36–40, 31–35, and 21–25 years, respectively. In comparison to male investors, female investors invest significantly more money on average. Over the past six months, there has been a roughly 3.5x rise in female investors. In addition, Jaipur, the pink city of Rajasthan, outpaces Jodhpur, Jhunjhunu and Bhilwara, which are other important cities in terms of the total number of investors participating in peer-to-peer lending.
A term-based investment plan with flexible tenures of 1, 2, 3, or 5 years, LenDenClub’s FMPP is a term-based investment plan. Because the invested money is reinvested frequently throughout the course of the term, investors benefit from compounding and can expect an annualised yield of 12.21 to 15.25% p.a. over the course of five years. Its status as a non-market-linked alternative investment asset class renders it immune to the risks of capital erosion brought on by market volatility and enables it to provide investors with higher returns as well as an additional layer of principal protection. Additionally, due to the design of the product, it competes with other fixed income asset classes like gold bonds and FDs.
In response to the launch of FMPP, Bhavin Patel, co-founder and CEO of LenDenClub, stated, “We have witnessed a stable growth in investors who are passionate about investing in alternative investment alternatives from the state of Rajasthan. FMPP is a trailblazing investment choice that prioritises the interests of the client in this era of “alternative asset classes.” Our entire operation is built on technology. Hyper-diversification, auto-investment, and reinvestment are key technological features that we have incorporated into our platform in an effort to significantly alter how investments are planned and executed, especially among Rajasthan’s younger and more technologically sophisticated audiences.
“Given the high inflation and market volatility that characterise the current investment climate, FMPP introduces a new paradigm of stability and transparency that has earned a lot of support from investors. Our singular objective is to guarantee that more than 99% of our clients achieve stabilised returns of 10–12% based on historical data.
Long-term lock-in is made possible by a set investment plan known as the FMPP, which makes compounding easier to start working and improves yields over time. With a higher annualised yield combined with the power of compound interest of stabilised returns and marginalised NPA, one could theoretically treble their assets in FMPP in about 6 years. The minimum investment is still 10,000 per investment, even though the plan’s structure permits investors to register several FMPP accounts with a total portfolio value of no more than 50 lakh, as required by the RBI. Because FMPP offers portfolio optimization and auto investments through an enhanced app experience, savvy investors can’t live without it as an investing alternative.
LenDenClub has a strong track record of user acquisition and loan disbursements, making it one of the fastest and most significant P2P lending firms in India. Since its founding, it has attained the significant milestone of disbursing 5,000 crores of credit. A $10 million Series A investment was also made on its behalf by a group of investors led by Tuscan Ventures, Ohm Stock Brokers, and Artha Venture Fund.