Gurgaon-headquartered financial technology group Antworks has partnered with Kolkata-based Grameen Shakti Micro Finance Services Private Limited (GSMS) to provide micro-loans under a joint loan program to borrowers rural and semi-urban areas of West Bengal and Bihar. This is the first initiative of its kind that will see a peer-to-peer finance company partner with an RBI-regulated microfinance company to provide microcredit through peer-to-peer lending. Antworks will use individuals as lenders for this program and lending to borrowers would be through Antworks’ peer-to-peer funding platform (www.antworksp2p.com). GSMS would be responsible for sourcing borrowers while the credit assessment would be carried out jointly by Antworks and GSMS. In addition, GSMS would be responsible for credit monitoring and loan collection so that loans do not become non-performing in the hands of participating lenders.
The first disbursement under the program was made on the auspicious occasion of the Puja festivities. Commenting on the occasion, Mr. Rajeev Mahajan, co-founder of Antworks, said, “Our vision has been to democratize the lending industry in India by attracting more participants to the industry. The benefits of technology in financial services are expected to reach everyone and we have made efforts to improve financial literacy inside India. The joint loan program with GSMS will go a long way in strengthening the microfinance sector in India. This program would also open the participation of HNIs and companies in the microcredit segment, thus helping to reduce the cost of loans and make loans more affordable for borrowers ”. Mr. Subhayu Ghose, co-founder of Antworks and CEO of Antworks P2P Financing Private Limited said: “Joint loan program with Grameen Shakti would prove to be a game-changer for the Peer-to-Peer financing market in India. and would provide an investment opportunity for retail investors. GSMS would act as a business correspondent for Antworks P2P Financing Private Limited and provide last mile connectivity to Antworks. This arrangement is a win-win solution for borrowers and lenders facilitated by GSMS and Antworks ”.
Micro Finance and P2P, a win-win combination
Speaking on the occasion, Mr. Gamesh Modak, Managing Director of GSMS said: “The microfinance industry must expand its sources of funding to reduce its dependence on banks.” He stressed that rural and semi-urban Micro Finance borrowers are sincere in servicing loans and always prioritize EMI obligations. He said: “After Covid19, the microfinance sector faces enormous challenges in terms of the availability of new funding from banks that are reluctant to grant new loans to MFIs. Even direct sales or portfolio sales were quite selective. The MFI industry operates primarily from secondary and tertiary funding sources. The introduction of the P2P segment of lenders to microcredit products may change the landscape of the MFI sector.
Antworks brings P2P to the masses
It should be noted here that RBI introduced regulations for the P2P finance market in India in 2017 and so far has issued around 21 P2P-NBFC licenses to fintech companies. However, P2P funding is still in its infancy in India and innovations like this would certainly help raise awareness of this investment opportunity which in turn would drive the growth of this industry. Antworks, a Gurgaon-based fintech startup, continuously works to integrate the P2P lending market.