NanoFin Enterprises, opened this month in Chennai, India to provide peer-to-peer lending using the Internet, similar to Prosper Marketplace and Lending Club.
According to a company press release, the venture is an attempt to consolidate the unorganized credit market and bring the borrower and lender under one roof for transacting business.
The initiative will facilitate direct interaction between lenders and borrowers in the same local area (matching lenders and borrowers via geography vs. risk like American firms). Loans will be available for education, personal, auto, business, home and equipment ranging from Rs 5,000 to Rs 2 lakh. (The smallest loans will be about $100 USD).
Nonofin will offer lenders and borrowers the opportunity to agree together on the amount of the loan, interest rates and the terms and conditions of the loan. In the NanoFin model, lenders must pay a fee of Rs 1,000 (about $20 USD) to become a member of NanoFin’s community.
I can’t help but wonder how they’ll manage the geographical matching of borrowers—what if a loan goes bad? Will there be a concern about neighbors taking enforcement of the loan into their own hands?
The Web site is available in English at www.nanofin.net.
Jessica Ward is a freelance writer based in the Seattle area. She writes on family, money and more. You can read more at www.jessicaward.me or www.pennywisefamily.blogspot.com