How Faircent achieved faster loan recollections by reducing time for mandate-creation by 87.5%

About Faircent

Faircent is India’s first peer-to-peer lending platform recognized as NBFC-P2P by the RBI. Faircent provides a virtual marketplace where the lenders and borrowers can interact with each other without any intermediaries like banks.

Both the lenders and borrowers benefit from Faircent – the lenders/investors get higher returns by lending directly to their peers, and the borrowers get loans for lower interest rates. Faircent’s motto “Every Percent Counts!” reflects the essence of their business – a pioneer in P2P lending in India.

Challenge

As a P2P lending platform, Faircent was onboarding customers and setting up auto-debits offline through Physical Mandate creation. However, managing payments via Physical Mandates came with multiple challenges –

• It took 8 days to create the mandate for a borrower
• Highly prone to manual errors
• With a higher number of users being onboarded, using solely Physical Mandates wseemed like an impossible choice to meet demand at scale.

With around 50 lakh users and 20,000+ mandates created on their platform, Faircent needed a more efficient method to create mandates. 

Faircent’s goals were simple:

• Onboard more customers easily by reducing the time taken to create a mandate. 
• Disburse loans in a short amount of time.
• Use a mandate-creation process that works at scale.
• Higher success rate for digital loan recollections.

Solution

After evaluating various solutions, Faircent decided to integrate with Cashfree’s eNACH payment solution to revamp their user onboarding and loan recollection.

With Cashfree’s e-NACH, Faircent is now able to provide the option of creating e-Mandates to their customers instead of offline-only Physical Mandates. With e-Mandates, the customers can register and manage their auto-debit process entirely online, without any manual intervention.

Results

1. 24-hour mandate creation: Faircent has been successful in bringing down the time for mandate-creation from 8 days to 1 day, an 87% improvement in onboarding speed.
2. Fully digital loan management process: As the time taken to create mandates went down, Faircent is now also able to disburse loans faster and more efficiently.
3. Operate at scale: By creating e-Mandates with Cashfree, Faircent could easily scale their customer onboarding process. Currently, Faircent uses e-Mandate to onboard 90% of the borrowers on their platform.
4. Reduced payment failures: With Cashfree’s robust capability to provide auto-retries for failed payments, payment reminders and timely notifications, Faircent has been able to increase the success rate of loan recollection by a substantial margin.
5. Increased customer satisfaction: Due to hassle-free, fully digital mandate creation process and shorter amount of time taken for loan disbursals, Faircent is seeing increased customer satisfaction throughout their lending and borrowing process.
6. Highly reliable customer support: Cashfree Support Team’s prompt response and resolution to queries has enabled Faircent to deliver superior platform experience to its customers.

Why eNACH?

Why should you use eNACH to enable recurring payments for your business?

eNACH is a secure and reliable payment method that automates recurring payments digitally. Creating an e-Mandate to automate the recurring payments is beneficial in multiple ways:

1. e-Mandates get activated within a single day
2. There is a one-time mandate-creation
3. Authentication requires just the user’s net banking credentials
4. e-Mandates can be created for amounts up to 50 lakhs
5. Businesses can offer multiple subscription models with e-Mandates. Cashfree allows you the flexibility to create a fixed model, pay-per-use model or a hybrid model

Find more about eNACH and create your account with Cashfree Payments here.