Mumbai: Financial services firm JM Financial said it that has acquired close to 10 per cent stake in peer-to-peer (P2P) lending startup Fairassets Technologies India.
In a filing to the BSE, the company said that its subsidiary JM Financial Products has executed the agreement to acquire securities representing up to 9.84 per cent on a fully diluted basis of the total paid-up capital of Fairassets Technologies.
Fairassets is engaged in the business of operating a web portal and mobile application under the name of Faircent.com which provides a virtual peer-to-peer lending marketplace.
Without disclosing the deal size, Fairassets founder and CEO Rajat Gandhi said that the funds raised from the transaction would be used for investment in technologies, big data analytics and to mitigate risks.
Fairassets existing investors include Mohandas Pais Aarin Capital, Singapore-based M&S Partners, former Yahoo Asia managing director Arun Tadanki and U.S-based entrepreneur Kshitij Jain, among others.
The startup has disbursed loans amounting to Rs 4.5 crore in the last one-and-half years and is currently witnessing an average Rs 1 crore worth of loan transactions every month.
"We expect to see loan disbursements go up to Rs 45-50 crore by next March and to Rs 400-500 crore in the next three to four years," Rajat said.
P2P lending refers to providing loans to individuals or businesses through online services which bring together lenders and borrowers. It is a new concept in India but is growing globally in countries like Britain and the U.S.
In 2015, Britain granted USD 32 billion P2P loans, while the U.S saw USD 22 billion financing.
The Reserve Bank of India (RBI) is likely to bring the nascent peer-to-peer lending under regulation and will also consult regulator Sebi before finalising the norms. The RBI has already released a consultation paper on the subject.
(With agency inputs)