|Flexi-Lockin (Double Advantage)
Avg. CIBL: 700+
Avg. Salary: 8-10L
Avg.Loan Tenure: 10-12 Months
Avg. 5x more than MF
No impact to any investors because of lowest NPA
Only the interest payout is expected to be taxed at the applicable tax rate of the investor; no tax should be payable on the principal repayment.
LiquiLoans does not deduct any TDS, and all gains are taxable in the hands of the investor, i.e., the requisite tax needs to be paid as per IT rules.
Risk 1: Counterparty Mitigation: Fund Flow Structure is similar to MFs (Escrow and Trustee Mechanism), and therefore funds never flow to LiquiLoans Balance Sheet or Bank Account.
Risk 2: Concentration and Mitigation: High Diversification (5–10x of Debt MFs, i.e., less than 0.5% exposure to 1 borrower), and therefore, even in crises, high diversification minimizes the impact due to NPAs.
Risk 3: Credit Risk Mitigation: Exposure only to Safest, i.e., creditworthy retail borrowers (average 700+ CIBIL score) and therefore the lowest NPAs, as borrowers sourced have high ability and intent to repay
Risk 4: Interest Rate Risk-Mitigation: There is no correlation between interest rate movements and, therefore, no MTM and volatility.
Risk 5: Alignment-Mitigation: LiquiLoans earn no fees or income until the investor earns full capital + return, and therefore 100% alignment, whereby the investor’s interests are fully safeguarded.
What do mean by lock-in and Flexi-lockin:
"Flexi lock-in" permits partial withdrawals or modifications during a specific period, but with some conditions or fees.
Lock-in is a period when an investment cannot be withdrawn without penalties, providing stability but limiting liquidity.
LiquiLoans (NDX P2P Private Limited) is an RBI registered NBFC – P2P. The Company received its seed funding in April 2018 from Matrix Partners (one of the largest VCs in India), which has invested in marquee companies such as OlaCabs, Treebo Hotels, ItzCash, Cloud Nine etc. Matrix Partners & Renowned Angel Investors (Mr. Kunal Shah – CEO of CRED, Mr. Satya Bansal – Ex. CEO Barclays Wealth India, Mr. Abhishek Dalmia – CEO of Renaissance Group, Mr. Ashutosh Taparia – Ex. Owner of Famy Care) etc. had cumulatively invested Rs. 12+ Crores in LiquiLoans (NDX P2P Private Limited) in the pre-seed round, given the Company’s defined focus on P2P Segment and its proven execution capabilities.
Any entity with valid KYC documents (PAN Card, Address Proof, Indian Bank Account, Email Id & Mobile No.) can lend via a Peer-to-Peer Platform. Eligible Entities include: • Individual (18 years old or above) • HUF • Corporate (Incorporated under Indian Companies Act or RBI Listed Finance Companies) • Partnership Firm • Limited Liability Partnership (LLP) • Body of Individuals • Society • Artificial Body
Each lender can onboard the platform by following a simple 3 step process:
LiquiLoans (NDX P2P Private Limited) needs to verify the data and KYC documents provided by Lenders in accordance with the Master Directions laid down by RBI. LiquiLoans (NDX P2P Private Limited), however, reserves the right to reject any application for registration or terminate the registration of the Lender or refund any funds received from the Lender without reason.
What is the maximum amount a Lender can lend via the platform? As per the updated RBI guidelines of Dec 2022, the following limits are applicable to any person(s) lending on P2P platforms: • A Lender can maximum lend INR. 50 lakhs across all P2P lending platforms. • A Lender can maximum fund INR. 50,000 per loan. • The maturity of the loans shall not exceed 36 months. • The lender lending more than Rs. 10 Lakhs across P2P platforms shall mandatorily need to produce a certificate to P2P platforms from a practicing Chartered Accountant certifying minimum Net-Worth of Rs. 50 Lakhs. LiquiLoans (NDX P2P Private Limited) platform has various offerings for Lenders and depending on the scheme option the minimum amount / holding period can differ. Lenders opting for the auto-invest feature are strongly recommended to invest a minimum of Rs. 1 Lakh to have a granularly diversified borrower portfolio.
• Process to Lend Funds via the Platform: A Lender can remit funds to the lender’s escrow account using any of the following methods: Log in to their LiquiLoans (NDX P2P Private Limited) account, click on Transact, then click on “Invest Funds” icon on the left corner of the dashboard and enter the amount they wish to transfer. The funds can be transferred in the Lender’s Escrow account through NEFT / RTGS / IMPS. The funds can also be transferred through the Payment Gateway using Net Banking or UPI. If the funds are remitted through NEFT / RTGS / IMPS, the lender mandatorily needs to update the fund transfer reference no. on the dashboard. • Manual Lending Feature: Lenders who want to manually view / assess / analyse / underwrite individual borrowers seeking loans (as and when available on the marketplace) – their profile, loan requirement details, credit score, monthly income etc. can opt to do so & then fund either a part or the full loan amount (Upto Max. Rs. 50,000 to one borrower). As and when that borrower gets commitment of total funds seeked by them, the lender needs to enter into a loan agreement with the borrower & once the agreement is duly signed by all lenders subscribing to the same loan, the committed funds need to transferred to the escrow account. To ensure a seamless and swift process for the borrower, any requirement listed by a borrower is initially matched to the auto-invest criteria set by existing lenders, if any. If the entire loan requirement is fulfilled via such matching, the borrower is immediately informed and the loan is pushed to the next stage without listing on the primary marketplace. Such loans will be reflected under the recently funded tab in the primary marketplace. The unsubscribed portion of the loan, whether in part or full, will be listed in the primary marketplace. • Auto-Invest Feature: LiquiLoans (NDX P2P Private Limited) platform offers an auto-invest feature to Lenders on the platform to have a hassle-free experience while lending to the borrowers. The Lender needs to define their criteria and basis the predefined parameters approved / NACH by the lender; funds will be automatically lent to the listed eligible borrowers / loans on the platform satisfying their predefined parameters. Auto-invest feature aims to granularly diversify the funds lent to the borrowers, which can be difficult while selecting borrowers manually. High level of diversification leads to negligible concentration on any one borrower hence reduces the risk of concentration with any particular borrower.
LiquiLoans (NDX P2P Private Limited) platform classifies borrowers into multiple categories depending on their past credit history and other parameters used for due diligence and underwriting of borrowers. However, currently LiquiLoans (NDX P2P Private Limited) platform only lists prime quality retail borrowers. Borrowers are vetted through a proprietary algorithm which checks various parameters, some of which include the following: • The borrower’s credit profile (CIBIL / Credit Bureau Score & Re-payment track record) • Social (Location, Age, Current Job Designation) • Banking History - This information is used to assess the suitability of the borrower • End use of the loan • Past performance of similar loans basis their end use, Referrer of the loan etc.
Lenders can expect a net pre-tax yield ranging upto 8% to 10.5% XIRR Max. on the net invested amount. LiquiLoans (NDX P2P Private Limited), however, does NOT guarantee any returns. In the past, our Lenders have earned an average return up to 10.5% - 12% XIRR depending on the scheme opted by them. Each lender should evaluate their risk appetite and understand all the risks associated with the lending transactions and that P2P platform does not assure return of principal / payment of interest. The platform shall NOT be held liable for any loss of capital or returns. Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by the NBFC-P2P and does not provide any assurance for repayment of the loans lent on it.
What is the process to sell / buy loans from the secondary marketplace? Each lender can opt to list their existing loan(s) for sale, as well as buy secondary loans from the secondary marketplace made available on the platform. Lenders shall have to define the sale / purchase specifications, and if a buyer / seller is available with matching requirements, the transaction will get executed and funds will be settled within 48 working hours. Secondary marketplace is purely a platform provided for transactional assistance (sell / purchase of loan/s) and should NOT be construed as a guarantee by LiquiLoans (NDX P2P Private Limited) that such sale / purchases will be executed. In the past, lenders have been able to sell their loan portfolio in the secondary marketplace within 2 days on our platform. The borrower's rights and obligations under a sale / purchase shall not be adversely affected in any way by such sale / purchases. LiquiLoans (NDX P2P Private Limited) platform offers a secondary market feature to the Lender where they can sell / purchase in whole or in part, the rights, title and interest in any loan transaction to / from any other lender registered on the Website. The flow of funds of any such sale / purchases shall only be through disbursement escrow accounts. All these transactions can be done only with the prior consent of LiquiLoans (NDX P2P Private Limited).
LiquiLoans (NDX P2P Private Limited) does not charge any upfront / transaction fee to the investor/lender. The platform brings complete alignment with the lender’s interests wherein the entire loan servicing fee of LiquiLoans (NDX P2P Private Limited) is earned only after the lender makes their indicated yield i.e. If the lenders’ portfolio’s net pre-tax yield is above the indicative pre-tax yield (XIRR) of the scheme selected, then LiquiLoans (NDX P2P Private Limited)’ fees will be the difference of Lender’s Actual Portfolio Pre-Tax Yield XIRR and the Indicative Pre-Tax Yield (XIRR) of the Lender, capped at higher of (1% per month or INR 20/- per collected instalment). The Indicative yield and loan servicing fees charged by the platform shall differ depending on the scheme options selected by the Lender on the platform. However, if the Lender wants to pay the fees upfront, they can indicate the same to LiquiLoans (NDX P2P Private Limited) in writing.
As with any type / form of lending, there are some risks, the biggest being that a borrower doesn’t repay i.e., there is a risk that a borrower may default. • LiquiLoans (NDX P2P Private Limited) minimizes the above risk by having the best-in-class risk management and borrower sourcing mechanism. LiquiLoans (NDX P2P Private Limited) ensures that investment of each lender is diversified across a large number of borrowers if the lender has opted for the auto-invest feature and hence protecting the lender from concentration risk of exposing oneself to only few borrowers. • In case of a default, LiquiLoans (NDX P2P Private Limited) uses a combination of soft and hard collections to collect missed payments on the lender’s behalf. • LiquiLoans (NDX P2P Private Limited) shall assist / facilitate the collection through its in-house collection mechanism and may also send a legal notice on behalf of the lender to the borrower. LiquiLoans (NDX P2P Private Limited) has already signed up with collection agencies to recover monies from overdue borrowers, who then on the investor’s behalf will try and reach out to the borrower and get back the outstanding funds on case-to-case basis. • LiquiLoans (NDX P2P Private Limited) does NOT guarantee any part / full recovery from borrowers.
Lock in period / MHP (Minimum Holding Period) on our platform refers to the minimum tenure for which the investor wants to reinvest his EMIs to enjoy the benefit of compounding returns. • LiquiLoans (NDX P2P Private Limited) platform offers various scheme options ranging from 0 months to 36 months. • The investors will also have the choice to access the secondary marketplace to liquidate their loans or reinvest the funds once the MHP is over. • In the past, lenders have been able to liquidate their underlying loan portfolios within 2 working days of executing the transaction. However, LiquiLoans (NDX P2P Private Limited) does NOT guarantee any secondary sale nor does it promise or give any timeline for successful sale