With the launch of its product, 12 club bharatpe a merchant payments and financial services provider, is expanding its consumer offering by entering the peer-to-peer (P2P) lending space.

Individual investors will be able to invest and borrow at 12% interest throught the '12% Club' app.

For the consumer product, BharatPe has partnered with LenDenClub and is onboarding Liquiloans. With the same partners, the fintech launched P2P lending for its merchants in 2019.

12 club p2p investors on BharatPe's platform will lend to its merchants to keep delinquencies low.

Because these merchants will be using BharatPe's payment infrastructure, the company will be able to underwrite these loans with greater ease.Borrowing for the '12% Club' will be fueled by a standard non-banking finance company (NBFC) such as Hindon Mercantile, which will make consumer loans.

According to Grover, the average loan duration on the platform will be between three and twelve months. Individual investors have already invested $5 million in 12 club bharatpe with loan disbursements totaling $1 million.

While the majority of the growth has come from referrals, the app now has close to 2500 daily downloads, according to the company. BharatPe first offered P2P lending to employees earlier this year. BharatPe recently entered India's coveted unicorn league after raising $370 million in a primary and secondary mix as part of a Series E funding round led by new investor New York-based Tiger Global Management.

P2P lending is not a new concept. The Reserve Bank of India brought this service under its regulatory purview in 2017.Even at the time, there were more than 21 lending players in the market, but the RBI's regulations ensured that only serious players with sound business models remained.Users with idle funds provide loans to potential borrowers identified by the service provider in 12 club p2p lending.These lenders are then paid on a regular basis by the borrowers, either all at once or in equal monthly installments.Following the release of the RBI's regulations in 2017, the space saw a surge in fundraising involving some of the segment's existing players.

Non-payment of loans is one of the most serious risks associated with this type of lending.Because P2P lending is an unsecured loan, there is no guarantee provided by the borrower for the lender to redeem in the event of a default.

However, the loan's unsecured nature is also the reason for its high return on investment when compared to other debt instruments.

"Consumers on the 12% Club app can invest their savings anytime by choosing to lend money through BharatPe’s partner P2P NBFCs.Furthermore, consumers can obtain collateral-free loans of up to Rs. 10 lakh through the 12% Club for a period of three months at their leisure," according to the statement.

BharatPe 12 club p2p stated that there will be no processing or pre-payment charges on consumer loans, and that loan eligibility will be determined by a number of factors, including the consumer's credit score, shopping history using the Payback loyalty system, or payments made using the BharatPe QR.Consumers who invest through the app can request to withdraw their funds at any time, partially or completely, without incurring any withdrawal fees. They can begin by investing Rs. 1,000, with an individual's maximum investment currently set at Rs. 10 lakh.The company stated that this would be increased to Rs. 50 lakh in the coming months.

BharatPe's introduction of P2P lending demonstrates fintechs' efforts to introduce newer features in order to keep captive audiences within the ecosystem, allowing them to earn and borrow at competitive market rates.