P2P firm i2ifunding launches protection fund for retail investors

BENGALURU: Venture catalysts backed peer-to-peer firm i2ifunding has launched a principal protection fund for retail investors. It plans to set aside 5% of the disbursed loans for this fund as a security measure for investors.

“The biggest concern that a retail investor has is that he should not loose the principal that he is investing even if there is some reduction in the re turn. One can never be 100% sure about the mini mal number of defaults that an investor may face, so this move acts as a pro tection measure,“ said Vaibhav Pandey , cofoun der of i2ifunding.

The loan processing fee charged to the borrowers ranges between 3% and nvestors are charged 1% as 8% and the investors are charged 1% as fund management and registration fee.

The platform defines a risk category for every borrower on its platform. These categories are from A to F, where A is the safest and F the riskiest.

The extent of principal protection depends on the risk category of the borrower. While 100% principal protection applies to risk category A, category F has a 50% protection.

“So far we have experienced only one default case where the borrower failed to pay for a period of three months, but then shortly after that payment was made we didn't need to use the fund till now. It's a measure that will instill a certain amount of confidence in retail investors,“ said Pandey .