Karun Thareja, Chief Marketing & Product Officer, Faircent, said that, “As the saying goes, “necessity is the mother of invention,” and it holds true in the realm of solutions. When there is a need, solutions tend to emerge. In line with this, I would like to emphasise that Faircent, as a peer-to-peer lending platform, operates on the concept of colending. Instead of two entities partnering to lend money, we have thousands of lenders collectively providing funds to a single borrower. This innovative approach has been in existence for nearly two decades worldwide, and we have successfully automated this process.”
He added, “I believe that the necessary technology already exists. Instead of simply displaying borrower information on a screen, we are discussing the integration with another NBFC system or bank system to enable such functionalities. Challenges such as hurdle rates have been addressed when we were engaged in peer-to-peer lending. For instance, when a borrower makes a payment and there are multiple lenders involved, we had to devise a system to distribute the funds among the lenders in a fair manner.”
He satiated, “Technologies have a crucial role to play in three key aspects of co-lending, particularly in mitigating biases. Manual or human judgment often introduces biases, so incorporating technology can help minimise them. Significant advancements have been made in detecting errors, forged documents, and similar issues through technology. When two partners or entities, such as an NBFC and a bank, are involved, employing technology ensures that the entire application process undergoes two systems, resulting in reduced errors. Additionally, automation is a primary focus of technology, enabling a reduction in processing time and delays. Thus, technology plays a vital role in co-lending by minimising biases, reducing errors, and expediting processes through automation.”
Also Read | Empowering Underserved: Technology’s Role in Bias-Free Co-Lending
“With more players expressing interest in co-lending, we can expect the evolution of solutions in this field. While such solutions already exist, they will continue to develop further. The underlying reason for this increased interest in colending is the desire of two entities to collaborate and optimise the utilisation of their funding resources. This core objective drives the growing popularity of co-lending. Given the current state of the global economy and the evident need for such arrangements, we can anticipate significant progress in this area moving forward,” he concluded.
