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Demystifying the 12% Club: A Look at BharatPe's P2P Lending Platform

This article dives into BharatPe's 12% Club, a program offering peer-to-peer (P2P) lending and borrowing services. Here's a breakdown of the key points:

What is it?

• The 12% Club is a P2P platform launched by BharatPe, a prominent Indian fintech company.
• It allows users to invest their money and earn interest (up to 12% annually) or borrow funds at a competitive rate (12%).

How it Works:

• Investors can lend money to borrowers through BharatPe's partner NBFCs (non-banking financial companies).
• Borrowers can access collateral-free loans for up to ₹10 lakh (approx. US$12,500) with a 3-month repayment term.
• The platform boasts features like daily interest credit, easy withdrawal options, and no processing or prepayment fees for borrowers.

Benefits and Drawbacks:

• Benefits:
  • High potential returns for investors compared to traditional savings accounts.
  • Easier access to credit for borrowers who might not qualify for bank loans.
  • Convenience and digital access through the 12% Club app.
• Drawbacks:
  • Risk of defaults: Investors may not receive their money back if borrowers fail to repay.
  • Limited investment amount (₹10 lakh) with planned increase to ₹50 lakh (approx. US$62,500).
  • Dependence on NBFCs: Partner NBFCs' reputation and track record are crucial factors.

Key Considerations:

• The 12% Club is a relatively new program, and its long-term performance remains to be seen.
• P2P lending inherently involves risk, and investors should carefully assess their risk tolerance before investing.
• Alternatives like fixed deposits or mutual funds might offer lower returns but with more security.

Sources:

• The article incorporates information from the original research paper along with relevant web sources.
• Links to these sources are not included due to formatting restrictions, but you can mention them in parentheses within the text (e.g., [4]).

Conclusion: