Samuhik| Fund your dreams

People talk about angel funding, VC but most of them are living in delusions of megalomania. Unless your idea is developed, has several use cases and customer testimonial and a steady steam of revenue in the near horizon, Indian VCs will not even touch you with a barge pole. There is a gap of seed funding and incubators who are there to genuinely support you turn your dreams into reality by helping you with small amounts of funding needed to create a proof of concept and refine your business case. Most genius ideas are hatched over a mug of beer, but unless you are able to convert the idea into something tangible, nobody will understand you.
Today I received my first listing at the P2P crowd-funding platform that I was developing. Please help me to plug this gap and help budding entrepreneurs.
Samuhik is plugging that


Social Lending in India

One thing that always baffles me that: Most banks charge about 15-27% on personal loans while they pay a minuscule 7-7.5%
These days, I am exploring the merits of creating a platform through which a person (esp. Indian citizens) can seek loan from their friends and family. This way the borrower can have access to cheaper credit, while the lender could either earn higher interest rate or get the satisfaction of helping a friend in need. (And being a friend indeed)
The features that I was seeking were:
1. Ability to connect to various social networking sites: Facebook, twitter, linkedin
2. Ability for an individual to bar certain individuals to know that they are in need of money.
3. Viral Marketing: A person can endorse his friend and spread the news of his requirement amongst his friend circle.
4. provision of anonymous lending (you can help your friend without him knowing that the money is from you)
5. Since charging interest might be awkward amongst friends, there would be a provision to donate interest to charity.
The first version of the website will be basically a forum where individuals can post their needs. They can subsequently contact each other and negotiate the terms and conditions of the loan. There would be no charge for such a service.
In the second version, we intend to add a few fee based services:
1. The borrowers would have a chance to get their documents verified, and deposit with us for safekeeping till the loan is not fully paid back. We are working with NSDL to incorporate hypothecation of shares and securities.
2. Lenders could use our bank accounts for transfer and collection of funds.
3. There would be a provision for an auction to determine the min. interest charged.
However I would really need your feedback (on about what features should/should not be there and how I can promote and popularize this initiative
Update: 11 Dec 2013: I have launched the beta version of the P2P crowd-funding website

education Personal Finance

Do you need personal loans?

Note: This article is meant for people with a steady source of regular income and a salaried bank account. Also the person is able to save more than 20-30% of his salary.
The top five reasons why Indians take a personal loan are:

  1. Medical emergency,
  2. Travel,
  3. Wedding,
  4. Investment (esp. stock market and speculative property investments),
  5. Helping a relatives and family.

And debt consolidation: Some people also use it to refinance their Credit Card dues or loans from informal sources. But in that case, one would realize sooner if not later that it was an expensive decision.
Most personal loans have 3 clauses –

  1. A regular EMI for the entire duration of the loan 6-24 months
  2. Processing fee from 2-4%
  3. Restrictions on prepayment. I.e. one cannot prepay in the first 3-6 months and not more than 50% of the loan balance outstanding in one payment.

These Terms and conditions often don’t match with the optimal debt repayment schedule for the individual. Hence given a choice, I always discourage people from taking a personal loan.
1. Bank overdraft: This is the easiest and the cheapest option for short term credit. If you have a salaried account, then just ask your bank and they would be more than willing to give you a generous 1-2L line of credit which you can repay at ease. Charges like account opening charges, commitment fee (0.25-0.5% of the line of credit) may look like a lot, but due to flexibility in repayment, the overall interest expense is much lower.
2. Credit Card: If you search the archives of enagar, you will find reference to an older article which tells you how one can draw money equal to the credit limit (which is higher than the cash limit) for 50 days at a cost of 3% (paid upfront) and 1.8% for subsequent months.
3. CrowdSourcing: Why do to an institution in the first place. Go online, dial a friend and fund yourself. P2P loans are cheaper, faster and simpler than most bank loans.