Can I open more than one account for lending?
At Monexo, you need just a single account to manage your portfolio. With this account you can fund several loans and have a dashboard view of your loan portfolio.
What is the eligibility criteria to become a lender?
To lend on the Monexo marketplace, you must meet the following basic criteria.
As an individual:
As a business/company:
Note: These are the minimum requirements. All lenders are subject to Monexo’s screening and approval process.
Is there a minimum amount I need to open a lender account?
At Monexo, the initial amount required to be transferred to the Escrow account for lending is INR 1 lakh.
Peer to Peer lending, like other asset classes, works best with portfolio diversification. With an initial investment of INR 1 lakh, you can build a lending portfolio across 100+ loans which ensures investment risks are largely minimised - enabling you to enjoy high yields consistently. Smaller investments, result in concentration of portfolio across fewer loans and hence do not provide for sufficient levels of diversification. Hence, initial investments less than INR 1 lakh are NOT recommended.
Why do you ask for my documents?
While we are not regulated we believe in self regulation.
As a platform enabling financial transaction we believe in dealing with Individuals who are NOT in Government Blacklists for Terrorism, Drugs or any dealing with human trafficking etc. We are also supportive of Indian Government fight against money laundering activities. The documents submitted by you enable us to carry out these checks.
Finally, your documents are stored electronically with bank level security.
Who makes the decision to lend?
As an approved lender, you make
You can create a portfolio of loans based on your return expectation and risk taking capacity.
Who am I lending to?
Monexo will be originating borrowers with following broad characteristics:
We believe P2P lending is about ‘credit inclusion’ at fair terms of interest. You can read more about various products on our borrower here.
What does Monexo verify prior to listing a loan in the marketplace?
Monexo lists only those loans which have gone through its proprietary screening process. This screening process has been built by the founders
What is a Monexo Rating?
Every loan application received by Monexo is screened and given a Monexo Rating.
The ratings range from M1 to M8, with M1 being the best. The interest rate associated with the M1 to M8 band will vary based on Monexo’s policy.
Once the loan listing is approved, the Monexo Rating is displayed in the marketplace along with the loan listing details for you to view.
Do note that Monexo Ratings are not a guarantee from Monexo on the performance of the loans.
What are the risks involved and how are they addressed?
All investments involve risk, but we are 100% committed to providing outstanding products and customer service, and protecting the safety and security of your personal information. Risks are addressed through:
Monexo has also partnered with CRIF Highmark Bureau in India and built a proprietary credit scoring model based on decades of payment behaviour by millions of Indian consumers to financial institutions in the past. This scoring predicts the probability of repayment by the borrower. We will also be writing various blogs - please do visit our blog section.
What is diversification?
Diversification is an important feature in peer-to-peer lending. It gives you the ability to lend small amounts to different loans instead of funding one loan in entirety without the administrative hassle of managing these small loan amounts. By diversifying the amount that you lend to a number of borrowers, your risks are reduced.
On Monexo marketplace you can lend as little as ₹ 1,000 per loan thus with ₹ 1,00,000 you can have 100 different borrowers in your portfolio with different risk profiles and tenor of repayment.
How do I build my loan portfolio?
Instead of funding an entire loan, you can participate by funding parts of loans.
You may choose to spread your money across several loans in order to create a diversified portfolio. Using sort & filter functions, you can balance the risks & returns and build a loan portfolio that suits your goals. You can choose a mix of different loan products, loan amounts, tenors, Monexo ratings and purpose of loan etc.
What is the maximum amount I can lend ?
As per RBI guidelines of Oct 4’2017
The following limits are applicable to any person lending on P2P platforms:
By agreeing Monexo T&C’s you are agreeing to the above.
How will I know when a loan is listed on the marketplace?
We encourage you to login to the marketplace regularly and view the loans listed. We will also periodically inform you about new loan listings in the marketplace.
What is the minimum amount that I can lend to a borrower?
The current minimum amount you can lend on a loan application is ₹ 1,000. You can fund a loan in multiples of ₹ 1,000. This can change in the future and our website will be updated with the new amount.
Where and how do I transfer money to lend through the Monexo marketplace?
Once you are an approved lender, you need to transfer a minimum amount of ₹ 1,00,000 into the escrow account. All bank charges will be borne by you. Once we sight the funds in the escrow account, the same will be reflected in your account details in the Monexo marketplace.
Escrow Account details:
Please note the following:
The transfer of the funds should be from the bank account mentioned in your lender application.
You may transfer either by IMPS/NEFT/RTGS or by cheque remittance.
If the transfer of funds is made by cheque, please email the scanned image of the cheque and deposit pay-in slip to email@example.com. The funds will be credited to your account after clearance of your cheque proceeds.
WE DON'T ACCEPT CASH DEPOSIT.
Please use your Monexo Customer ID as a transaction reference.
What is IDBI Trusteeship Services Limited?
IDBI Trusteeship Services Limited (ITSL) is a third party administrator. Monexo is the 1st online Peer to Peer Lending company in India to bring this global best practice.
ITSL serves a key role of holding funds and executing orders of lenders and borrowers. Your money is in your control through the ITSL escrow account. By keeping an arms length from the funds of lenders and borrowers, Monexo provides the following safeguards to its customers:
(a) Monexo will not be able to use customers funds for internal operation or other matters and
(b) It serves as a business continuity plan in case Monexo ceases to operate
An important aspect of Monexo's offering to customer is the seamless online and swift fulfilment of borrowers and lenders need through ITSL. By this mechanism, borrowers and lenders do not interact directly with each other for exchange of funds and maintain their anonymity. This also benefits the borrowers as they will receive a single credit into their bank account with the full loan amount instead of getting multiple credits from each lender who has committed funds to his loan.
Do note, ITSL simply acts as an administrator and does not guarantee your investment in any way.
How can I withdraw funds?
You manage your own money. We give you flexibility to withdraw your available balance with ITSL by sending a email request to firstname.lastname@example.org anytime. The funds that you have already disbursed to a borrower and the funds that are committed in the marketplace will only be available for withdrawal as and when you receive borrower repayments.
By reinvesting your funds in the marketplace, you will earn better yields.
Are funds withdrawn from my escrow account each time I fund a loan in the marketplace?
Every time you commit for a loan in the marketplace, the amount you have funded is set aside while the listing is still active in the marketplace.
For example: If you have a balance of ₹ 450,000 in your escrow account and you fund a loan with an amount of ₹ 40,000, the amount available to you for funding further loans in the marketplace will reduce to ₹ 410,000. As soon as the listed loan gets funded as per funding norms, your funds (₹ 40,000 in the above example) are withdrawn from the escrow account and disbursed towards the borrower loan.
In the following scenarios, your funded amount that has been set aside will not be withdrawn from your account and will be made available to you for lending:
What happens if a borrower is late on a payment?
All borrowers are required to provide auto-debits to their bank account for their monthly repayments. They are given monthly email reminders prior to their payment due date.
The borrower is given a grace period whereby he/ she needs to pay latest by the 5th of the month to provision for banking holidays, weekends etc.
If the borrower does not transfer money by due date:
The late payment fees and penal interest received from the borrower is appropriated by Monexo to meet the collection costs / legal expenses incurred / to be incurred in connection with the loan.
What happens in case a borrower defaults?
Monexo follows screening criteria for approving borrowers. However, Monexo cannot guarantee repayment of loans as borrowers may miss repayments due to various reasons.
When a borrower misses a payment, Monexo makes reasonable efforts as permitted by RBI regulations to collect outstanding payments. Regular follow up with the borrower is done by Monexo for overdue amount.
When the overdue is for more than 30 days, it is referred to an approved collection agency / law firm / an arbitrator to facilitate collection of the overdue amount on your behalf. The fees payable to the collection agency is borne by Monexo and in lieu of this the late payment fee and penal charges collected from borrowers will be appropriated by Monexo to meet the costs.
How do I receive my monthly payments?
When a borrower makes a repayment on a loan, after a short processing time, your portion of the payment will be added to your available cash balance in your escrow account. You can use the funds to invest in more loans or transfer them to your bank account, as you wish.
What happens if a borrower pays off a loan early?
The borrower has the option to prepay the balance loan amount, provided he/ she intends to repay 100% of the amount due (including the interest due till date) in one go before the due date. There is no penalty or charge to the borrowers for prepayment. On receiving the balance amount from the borrower, your portion of the repayment received will be added to your available cash balance in your escrow account.
However, partial prepayments are not allowed.
What happens if Monexo shuts down?
Monexo has appointed an independent administrator, IDBI Trusteeship Services Limited (ITSL) to manage the escrow account. In the event of Monexo's assets being harmed or Monexo going into liquidation, this will not affect your money. This still belongs to you. For money that has been lent, ITSL will continue to receive repayments from borrowers and distribute the collected payments to the lenders.
Is this product a note, bond or Collective Investment Scheme?
No. This is a pure loan in which you are the lender and the person who is receiving the funds is the borrower. Monexo has created this marketplace to connect smart and savvy lenders to smart borrowers.
How can I transfer funds to Monexo?
You can transfer funds to Monexo through any of the following options:
The transaction limits, bank charges and timings are given below. Do note this may vary with your bank and is not to be construed as fees/charges payable to Monexo.
What are the fees charged from a lender?
Monexo earns only when you earn
* Once you add funds amounting to INR 1 lakh and above, the 4% + GST fee on repayments collected will be updated to 2.5% + GST on subsequent loans that you fund
Do I earn interest on my money held in the escrow account?
You start earning interest when the loan that you have funded is disbursed to the borrower. You do not earn interest on your committed funds in the marketplace or in the money held in the escrow account. To maximise your returns, please monitor your loan portfolio regularly to deploy your funds effectively.
What are the returns I can expect from the funds that I lend?
When do I start earning interest?
When you have selected the loans to fund and we have disbursed the funds to the borrowers you will start earning interest. You do not earn any interest while your funds are held in the lender's funding account.
What is Monexo Auto - Invest?
Monexo Auto-Invest is a feature that helps you to automatically invest in loan listings without manually viewing and funding each loan. All you need to do is choose your lending criteria that will be applied each time loans get listed in the marketplace. If the loans match your criteria, your order will be placed.
Why Monexo Auto - Invest?
With Monexo Auto - Invest you can setup your own lending criteria based on desired diversification & risk/ return expectations. You keep control and have the flexibility to change criteria any time. You can continue to manually fund loans while you are a user of Monexo Auto-Invest.
How Monexo Auto - Invest works?
When you turn on Auto - Invest, the funds available in your escrow account are queued for funding the loans in the marketplace. We call this queue as the Investment Queue.
Monexo Auto-Invest engine runs daily at 10am IST, 12 noon IST, 3pm IST and 8pm IST. It finds those loans that are listed in the marketplace that meet lending rules of lenders that have opted for auto-invest. It checks the cash balance of these lenders.
It funds loans automatically these lenders based on FIFO (First In First Out) method i.e. the funds which are queued first will be used first to fund loans
How to activate Auto - Invest?
You can activate Auto - Invest by following these steps:
Maximum Funding per Borrower means the maximum portion of your funds that will be used to fund a particular borrower. This helps you cap your exposure per borrower. It is calculated as a % of your total funds as on today. For eg: If your total funds are Rs 5 lacs and you setup 2% as maximum funding per borrower, not more than Rs 10,000 would be allocated to any borrower through auto-invest.
Total funds is your "Net Funding + Earnings" as explained below:
Net Funding + Earnings is the sum of total funds transferred by you into the escrow account (net of withdrawals) and interest earnings on disbursed loans (net of Monexo fees)
With this you can decide on what portion of your funds available do you want to invest in loans listed based on Monexo ratings ( M1 to M8 with M1 being the best). You may choose your diversification based on your risk return expectation. You have the following options to set a portfolio:
Diversified Risk Portfolio
Conservative Risk Portfolio
Moderate Risk Portfolio
Aggressive Risk Portfolio
Create Your Own Portfolio
Am I eligible for Auto - Invest?
Yes. Every Monexo lender is eligible for Auto - Invest.
Can I fund loans manually after I enable Auto - Invest?
Yes. Being a Monexo Auto Invest user, you can continue to fund loans manually also.
How long does it take to invest my funds with Monexo Auto - Invest?
It depends on various factors, such as
1. The lending rules you have selected for Auto - Invest.
2. Your cash balance in escrow account
3. Inventory of listed loans that match your criteria
4. Other lenders who have opted for auto-invest
Who is a "My First Loan" borrower?
Indian demographics are changing and getting younger. These young people are migrating cities leaving their family behind for jobs. 80% Indians lack access to credit as they do not have a credit score. Banks and NBFCs serve only those who have a past loan record.
Monexo has launched loans for salaried borrowers who are "new to credit" - which is a step towards financial inclusion and democratising finance. A "My First Loan" borrower is taking a loan for the first time. He does not have a borrowing history and hence does not have a credit bureau score or report. However, many of them can be good credit. Monexo offers "My First Loan" to such borrowers after a stringent screening process.
What is the eligible loan amount for a "My First Loan" borrower?
"My First Loan" borrower is given a loan offer of Rs 50,000 for a tenor of 12 months. These loans are priced higher and thus you earn superior returns when compared to a loan which has a credit score. As a lender, we suggest you to diversify across "My First Loan" borrowers by funding not more than 5,000 per loan.
What is the screening process used for a "My First Loan" borrower?
Every borrower is different when it comes to finances. In addition to our regular screening process, we gather a range of financial, digital and social data about the "My First Loan" borrower. This includes reviewing his bank statement, income status, Linkedin profile, lookalike score and digital behaviour. We insist on additional electronic verifications in case of "My First Loan" borrower and use proprietary algorithms to identify creditworthy borrowers.
What is a lookalike score?
We are introducing an alternative score called "Lookalike score" for "My First Loan" borrowers. The applicant has been scored on a similar logic as is done for borrowers with a bureau score and considers the parameters that influence the repayment track record significantly. The lookalike score is factored into the Monexo Rating for each “New to Credit” borrower and complements the screening process.
Is there any difference in the listing or funding process of "My First Loan"?
There is no difference in the listing or funding process. You can view these loans in the same marketplace. In the loan details page, you can view the lookalike score for these loans. If you have chosen auto-invest, these loans are also considered as part of automated investing.
We encourage you to participate in funding these loans.This would be a big step towards financial inclusion.
What happens if a"My First Loan" Borrower is late on making a payment ?
If a 'My First Time' Borrower is late on a payment, Monexo follows the same collections process as applicable to any other borrower on our platform
Here is a summary of the collections process:
Monexo provides free collections support for the first 30 days of non-payment from borrowers. Post 30 days, the collection fee (if any) will be borne pro rata between all lenders associated with the loan.
What is Monexo's "Credit Shield" ?
Monexo's Credit Shield is an innovative, specialised group insurance policy which helps protect lenders from some specific event based risks that might affect a borrower's ability to make loan repayments. In the event of occurrence of such circumstances which might adversely impact a borrower's financial position, the proceeds from insurance claims will be assigned to the lenders to offset the outstanding principal or EMI (as per the terms and conditions of the insurance cover)
This Credit Shield has been structured by Monexo in partnership with one of India's leading private insurance companies.
How does Monexo's Credit Shield add value to a lending portfolio ?
Monexo's Credit Shield helps make P2P lending a hassle free investment for lenders by cancelling out some common, unforeseen 'event based' risks which impact a borrower's ability to make loan repayments.
With this insurance cover, risk of financial loss for the lender, due to non-payment of dues from borrowers inflicted by (i) accidental death (ii) Total or Partial permanent disability and (iii) Job loss is mitigated as outstanding principal or EMI (as per the terms and conditions of the insurance cover) is protected and refunded back to lenders.
The best part - it comes at zero additional cost for the lender.
What is the coverage limit and the circumstances under which a claim can be made ?
|Cover against||Description||Coverage limit|
|Accidental Death of Borrower||In the event of borrower's loss of life due to injury caused by accident, the insurance company will insure the borrower and reimburse the outstanding principal directly to all the lenders associated with the relevant loan contract. The loss of life should occur within 365 days of the accident. Accident, for the purpose of this insurance cover, means any sudden, unforeseen and involuntary event caused by external and visible means||100% of outstanding principal|
|Permanent, Total and Partial Disability of Borrower||In the event of borrower being totally or partially disabled due to an accident or sudden illness (non pre-existing condition), the insurance company will insure the borrower and reimburse upto 100% of the outstanding principal to all the lenders - with the payable compensation being a pre-determined percentage of the sum insured||Upto 100% of outstanding principal|
|Borrower Loss of employment||In the event of the borrower being terminated / temporarily suspended / retrenched from employment by his/her employer, the insurance company will pay a fixed lumpsum upto 3 months of EMI directly to the lenders associated with the relevant loan contract||Upto 3 months of EMI payable by borrower|
Please note that the above constitutes only a summary of the cover. Actual coverage is subject to the terms, conditions and exclusions set out in the Certificate of Insurance, purchased by Monexo's partner entity for the benefits of Borrowers and Lenders who enter into loan contracts with Monexo Fintech Pvt. Ltd.
Does the lender need to make a claim ?
No - the lender does not need to make any claim. Since the insurance product is structured as a group cover for all borrowers, those, who are unable to make loan repayments due to the conditions/circumstances listed above will make the necessary claims and the claims proceeds will be processed and paid by the insurance company to lenders associated with relevant loan contract(s).
What is the process for settlement of claims proceeds to the lender ?
Payment of claims proceeds to the lender will be initiated by the insurance company and paid into Monexo's Escrow account with IDBI Trusteeship Services Limited ("ITSL") - a third party administrator. The third party administrator will then apply payments to relevant lender accounts in accordance with the terms and conditions of the insurance cover.
Are there any exclusions to the coverage ?
Yes. There are certain exclusions from coverage as there are certain risks which are not within the insurance company’s risk appetite or which it cannot insure. Without limitation, the following are excluded:
Who pays the premium associated with Monexo's Credit Shield ?
This insurance cover is purchased and paid for by Monexo's partner entity - it is completely free without any additional cost to the lender.
When does insurance coverage commence ?
Coverage in relation to any specific loan commences on the date the loan is disbursed to the borrower and ends on either the date the loan is fully repaid to the lender, or the date stated in the Certificate of Insurance in relation to the loan which is issued after loan disbursement. This insurance can be withdrawn by the issuer anytime. In that scenario, it ceases immediately.
Does Monexo's Credit Shield guarantee returns ?
No. Monexo's Credit Shield is only an additional tool which helps the lender mitigate risk of loss due to certain unforeseen event based risks. It does not, in any way, guarantee investment returns nor does it remove the repayment obligations of borrowers. As with all forms of investment, the lender’s capital continues to be at risk.
What data is passed on to the insurance company and for what purpose ?
Monexo will provide the insurance company with basic information in relation to the loan such as Borrower's name and KYC info - solely for the purpose of administering and providing the insurance. No information on the lenders will be required or shared with the insurance company. All information is kept strictly confidential and used only for the purposes of this insurance.
Are loans disbursed prior to September 2017 also covered under Monexo's Credit Shield ?
Since Monexo's Credit Shield insures the outstanding principal / EMI (as per the terms and conditions of the insurance cover), it covers all existing and new loans irrespective of the date on which such loan contracts were entered into.