An Interview with Lucas Bianchi, Co-Founder & Promoter of Namaste Credit. As a co-founder, Lucas is excited to be working with a great team at Namaste Credit to build amazing technologies that are revolutionizing finances for SMEs and individuals across India.

1. Lucas Bianchi,
Co-Founder & Promoter of Namaste Credit
CASE VIEW WITH LUCAS BIANCHI
P2P LENDING IN INDIA: DELIVERING DISRUPTIVE
INNOVATION IN ALTERNATE LENDING SPACE
As a co-founder, Lucas is excited to be working with a great team at
Namaste Credit to build amazing technologies that are revolutionizing
finances for SMEs and individuals across India.
ET CASES
November 2016
Interviewed
by
Dr. Nagendra V. Chowdary
Ref. BFS-2-0010B-1
Passionate about
research, analytics,
innovation, and the
financial markets,
Lucas Bianchi is now
focused on building
Namaste Credit, an
exciting new financial
technology platform
for loan facilitation
and servicing in
India.
Namaste Credit has
developed several
patent-pending
systems designed
to streamline and
improve the loan
creation and
servicing processes.

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Interview with Lucas Bianchi P2P Lending in India: Delivering Disruptive Innovation in Alternate Lending Space
ET CASES
P2P Lending in India: Delivering Disruptive
Innovation in Alternate Lending Space
Lucas Bianchi
1. What according to you is P2P (Peer-to-Peer) lending and how does it work in general?
What distinguishes P2P lending from the moneylenders/pawn-brokers (still prevalent
in some pockets of Indian landscape, especially in rural and semi-urban areas)? Would
the presence of traditional moneylenders affect the business prospects of serious P2P
players?
P2P lending happens between two parties that come together online only and most likely
would have not known each other before the transaction. In this case, the introducing
platform provides the comfort. Traditional moneylenders could significantly broaden their
potential scope of clientele, but would need to change their existing modus operandi and
way of thinking. I believe that traditional moneylenders could be good partners for online
P2P platforms. Transparency of transaction and funds may be one of the issues.
2. What are the differences between financing through banks and financing through
P2P platforms? Is P2P financing a complementary or competitor to conventional
banking?
Financing through banks is an opaque and typically in-person process. Financing through
the P2P platforms is transparent and online. P2P financing could largely be competitive
withbanks,butifitincludesbanksaspotentialfundingpartners,itwouldbecomplementary
(as is the case with Namaste Credit).
I believe that traditional moneylenders could be
good partners for online P2P platforms“““““
”””””

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P2P Lending in India: Delivering Disruptive Innovation in Alternate Lending Space Interview with Lucas Bianchi
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3. In India, we get to see two types of P2P lending players – largely Social P2P lenders
(Rangde, Milaap, Kiva, etc.) and Business P2P lenders (Faircent, i-Lend, Namaste Credit,
IndiaLends, InstaKash, Lendbox, i2iFunding, etc.). What distinguishes these two types
of P2P lenders apart from their respective purposes? Which of these two do you
foresee to have a sustainable business over the next few decades?
By this definition, I believe that the first set of lenders (Social P2P lenders) focus largely on
smaller ticket size loans for socially responsible activities and funded by individuals. The
second set (Business P2P lenders) would have any range of end-users (such as those
planning for weddings or expanding any range of businesses). They would have slightly
larger ticket sizes and would include institutions as funders. It is quite possible that both
have sustainable models over the longer-term.
I was interested in starting a business and India
seemed like a good place to do so given the growth
prospects and lack of meaningful solutions in the
market to date.
“““““
”””””
4. How do you see the growth parameters of P2P lending in international as well as
Indian scenario? How different is it operating such a business in India vis-à-vis global
platform?
P2P Lending has grown very significantly in the US and in several other developed markets
(visit finovate.com/blog/). In India, it is still in its infancy. I believe that a few reasons for
this include:
a. Comfort level with and penetration of internet usage across the population
b. Conservatism of business and lending practices in India vs other countries
c. Depth of the online and start-up community, especially in “FinTech”
d. General ease of doing business

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Interview with Lucas Bianchi P2P Lending in India: Delivering Disruptive Innovation in Alternate Lending Space
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5. What according to you are the business revenue models of P2P lenders? How do they
make money? What are the different models/formats that P2P players adopt to
differentiate themselves?
Most P2P lenders are paid a transaction fee, when the deal is consummated (either by the
borrower, the lender or both). However, few socially-focused platforms may not charge the
users, but rather operate with funds received from donors. What differentiates various
P2P players are:
1. The customer segments they operate in
2. The lenders they work with
3. The value they add as an intermediary
4. The ease of using the platform for all parties involved
For Namaste Credit, we reach out to borrowers
directly and also through channel partners and we
only work with institutional lenders on the
funding side.
“““““
”””””
6. How do P2P players reach out to the potential borrowers? How does one go about
lending using these platforms?
This varies widely based on the platforms. For Namaste Credit, we reach out to borrowers
directlyandthroughchannelpartners.Weworkonlywithinstitutionallendersonthefunding
side. Effectively, we provide a competitive environment that gives an experienced borrower
the best result.
7. The interest rates charged by P2P lenders, as several industry veterans and analysts
argue, are quite high (ranging between 9.5% and 36%). How does this help in increasing
penetration of P2P lending in India?
IamnotsureIunderstandthequestionexactly,butthewayIseeit,thethreemainquestions
that customers would ask are:
1. Am I getting a loan? 2. Is the interest rate competitive?
3. Is the process to get the loan swift?

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P2P Lending in India: Delivering Disruptive Innovation in Alternate Lending Space Interview with Lucas Bianchi
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If they are able to:
1. Get a loan where they were not able to before
2. Get it at a rate competitive to or better than the available traditional channels
3. Get the funds much more quickly than otherwise
Then the customer would be happy which in turn help in increasing P2P penetration.
Bottom line is that the interest rate charged to a particular borrower may seem fair, high or
lowtothembasedontheiralternatives. IfP2Plendingisexpandingtherangeofpossibilities
to more borrowers, then it would likely help to increase overall lending penetration across
India.
Effectively we provide a competitive environment
that gives an experienced borrower the best result“““““
”””””
8. What are potential benefits of leveraging the P2P platform for both borrowers as well as
lenders?
Borrowers: Easy access to a broader set of potential lenders and significant time saving
when compared to approaching multiple lenders directly.
Lenders: Improved customer acquisition process that is streamlined and validated by a
thirdparty.
9. What according to you are the potential risks for a P2P lender and how can they be
addressed effectively?
A few potential risks for a P2P lender that I can think of are:
1. Only borrowers who cannot find financing from any other place would come online to
look for finance (thus self-selection of poor quality borrowers)
a. Namaste Credit has a rigorous screening process in place
2. Possibility of misrepresentation by customer owing to less face-to-face interaction
a. Namaste Credit has the P2P platform enable face-to-face interaction

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Interview with Lucas Bianchi P2P Lending in India: Delivering Disruptive Innovation in Alternate Lending Space
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10. What is the role of technology in shaping P2P landscape in India? Wouldn’t the cost
of technology be an entry barrier to serious potential P2P players?
Very open-ended question with fully open-ended answer.
There is a huge possibility to leverage technology in a much more meaningful way than is
being done today, using Aadhar, mobile phone data, etc. This may eventually pose an
entry barrier to new P2P players or enable them to become dominant in the market.
11. How is P2P different from crowdfunding?
It depends how you define each.
My understanding of crowdfunding is that it is typically focused on equity, whereas P2P
generally refers to credit. Crowdfunding is also generally used for specific projects rather
than companies, but there is no hard and fast rule to this.
12. Many industry analysts and quite a large number of customers complain that
regulatory framework needs to be strengthened bereft of which P2P lending may go
the same way as that of Micro Finance Institutions (MFIs) in India. What are your
suggestions for strengthening the regulatory framework? What are the specific areas
that need to be strengthened?
Laying out a regulatory/legal framework of any kind for P2P lending would be a good start.
This happened with the MFI industry only after a significant negative event and has since
then enabled the industry to flourish. Any kind of regulatory certainty would enable equity
investors to get more comfort with funding startups in the space.
There is a huge possibility to leverage technology
in a much more meaningful way than is being
done today, using Aadhar, mobile phone data, etc.
“““““
”””””

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P2P Lending in India: Delivering Disruptive Innovation in Alternate Lending Space Interview with Lucas Bianchi
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13. One of the biggest global success stories in P2P lending has been Lending Club in the
US, becoming the 14th
largest bank in the US. What lessons and best practices can be
learnt and adopted in India from the successful model of Lending Club?
1. Set up a platform that works very specifically within a defined legal and regulatory
framework
2. Enable alternative/private lenders to provide financing during a credit crisis (2008–
2009 is when Lending Club flourished)
3. Build a system that enables full transactions to be completed online in a seamless
manner for investors and for borrowers alike
4. Open up the information and data on the system for a broader set of people to get
comfort with the underlying data and veracity of the transactions
5. Initially focus on borrowers where the credit decision process is simple and straight
forward
6. Engage a set of lenders who are open to taking higher risk for higher return potential
Simply laying out a regulatory/legal framework of
any kind for P2P lending would be a
good start.
“““““
”””””
14. How do you see the competitive landscape of P2P financing space in India over the
next decade?
It is not very clear what will happen over a 10-year period, but I am sure that there will be
very significant and meaningful innovations and impact on the overall credit market. I
believe that there will be many more players of various shapes, sizes, formats, etc., that
emerge for various end customer segments.

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Interview with Lucas Bianchi P2P Lending in India: Delivering Disruptive Innovation in Alternate Lending Space
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15. What do you think are the impediments for the future development of P2P lending
in India? How do you foresee the future of P2P lending in India? How do you see the
investments into the sector to maintain the growth prospects?
Impediments for future development include, but are not limited to:
1. Uncertain regulatory environment
2. Regulatory framework that makes the lending process too “heavy” – Paper-based and
in-person
3. Acceptance of eKYC and other forms of electronic verification (online bank statements,
etc.)
4. Better internet access that is more widely used by potential borrowers and lenders
5. Awareness of borrowers and lenders of an alternative, technology-driven approach
6. Equity financing for P2P platforms until they become self-sustaining
I see the future of the sector to be fairly chaotic, but growing in many different directions.
Thus far, it seems that equity investors have largely backed new direct lenders (such as
Capital Float, LendingKart & NeoGrowth Credit). I feel that there is a large opportunity to
fund technology-driven solutions, which has not yet happened in a meaningful way.
16. What according to you would be the five Critical Success Factors for a seasoned P2P
lending player in India?
1. Strongly ethical core beliefs and implementation
2. Results-oriented technology and operational team
3. Largely hands-off regulator that is focused more on prosecution of bad actors than on
controlling every transaction or process
4. Simple process for lenders and borrowers alike
5. Meaningful transaction volumes
Namaste Credit is a true loan marketplace that
provides borrowers multiple true
in-principal offers online
“““““
”””””

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P2P Lending in India: Delivering Disruptive Innovation in Alternate Lending Space Interview with Lucas Bianchi
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17. What was your background and what triggered you to kick-start a P2P lending business
in India? What has been its financial performance since inception? Do the margins
warrant risks? What are the unique features of Namaste Credit’s platform vis-à-vis its
competitors?
Before founding Namaste Credit, I worked in New York for nearly 15 Years, half of them in
Sales to Financial Institutions and half of them as a Research Analyst and as an Investment
Banker. I was interested in starting a business and India seemed like a good place to do so
given the growth prospects and lack of meaningful solutions in the market to date.
Performance of our company to date has been slower than I would have liked, but certainly
positive and growing month/month and quarter/quarter. We do not take any credit risk, so
margins unaffected by the loans we facilitate. Our business is entirely dependent upon
volumes and those have not been sufficient to date, but have been growing in the right
direction.
Namaste Credit acts as an intermediary that makes
the application process easy for borrowers and the
customer acquisition and vetting process easy
for lenders.
“““““
”””””
Unique features of Namaste Credit’s platform include:
1. The CLEAR technology leader as a lending marketplace
a. ONLY MARKETPLACE to have end-to-end digitized process that provides:
i. All documentation in digital format
ii. Multiple Principal-Offers before ANY lender calls
iii. Patent-pending preference-based lender-borrower matching algorithm
iv. Automatically scheduled Personal Discussion (PD) visits

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Interview with Lucas Bianchi P2P Lending in India: Delivering Disruptive Innovation in Alternate Lending Space
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b. ONLY COMPANY that offers following features to LENDERS:
i. Full Credit Assessment Memo “CAM” report with all relevant documentation
ii. Fully automated e-verification of KYC information
iii. Highly calibrated data-driven credit score
iv. Full financials downloadable in XLS
2. A true loan marketplace that provides borrowers multiple in-principle offers fully online
and before any direct contact with a bank or non-bank lender.
3. A true FinTech innovator that is constantly coming out with new products
a. Filed 2 patents on core functionality & systems
b. We are currently beta testing our Auto-Save and Auto-Pay (ASAP) product
Namaste Credit does credit scoring of application
based on proprietary credit scorecard that has been
developed using data from a database of 30,000
SMEs from India
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”””””
c. We have a live “white labeling” mandate from a leading MNC bank to digitize
their entire loan process across SME products and LAP
d. We have developed partnerships with several leading B2B e-commerce
marketplaces to develop credit-financing programs for their SME customers
18. What are the business and operating models of Namaste Credit’s P2P lending?
Namaste Credit acts as an intermediary that makes the application process easy for
borrowers, customer acquisition and vetting process easy for lenders. Lenders pay us based
on:
1. Lead provisioning
2. Loan sanctioning and disbursal

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P2P Lending in India: Delivering Disruptive Innovation in Alternate Lending Space Interview with Lucas Bianchi
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19. What should be the profile of lenders and borrowers who wish to offer or lend credit
through your P2P platform? Can one person act as both a borrower and an investor?
What is the process of due diligence at Namaste Credit and how would Namaste
Credit’s technological tools help in providing the credit score to the borrowers?
A company registered as an NBFC or a Bank in India.
Yes, someone can act as both a borrower and a lender.
Namaste Credit does:
1. Verification of KYC documentation
2. Financial spreading into XLS of annual results for business and self-employed borrowers
3. Credit scoring of application based on proprietary credit scorecard that has been
developed using data from a database of 30,000 SMEs from India
Our new product (ASAP) will enable a more
standardized and efficient recovery (servicing) tool.“““““
”””””
20. How does Namaste Credit’s P2P platform technology enable direct matching of
borrowers and lenders? How does the platform ensure standardization of services
rendered?
Lenders provide preference and we forward information to them only for the potential
borrowers that match these preferences.
We provide borrower information to all of the relevant (interested) lenders at the same
time. For example, if a borrower is matched with the preferences of five lenders, our system
sends their information to these five lenders simultaneously (without full contact
information).

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Interview with Lucas Bianchi P2P Lending in India: Delivering Disruptive Innovation in Alternate Lending Space
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21. How does Namaste Credit calculate the interest rates for its borrowers and what is
the average rate of return for lenders?
The rate of interest that lenders provide is entirely determined by them. We do not set
pricing.
The average ROI for Home Loans is 9.5% for LAP it is 11%, for Secured CC limits 10.5%, for
unsecured business loans 17%, for personal loans it 14%.
22. One of the biggest casualties of MFIs has been loan recovery rate. What has been
Namaste Credit’s experience in loan-recovery? Does Namaste Credit adopt any unique
recovery practices to encourage effective recovery process?
To date we have not been involved in loan recovery. Our new product (ASAP) will enable a
more standardized and efficient recovery (servicing) tool. We are very optimistic that this
could improve recovery dynamics significantly.
23. What are the three biggest challenges for Namaste Credit’s business prospects and
how would they be overcome?
At present, the three largest challenges are:
1. Getting institutional lenders to move more of their own processes online and related
to that, getting them to accept information and related documentation in a digital
process
2. Finding and onboarding productive and honest sales people efficiently
3. Fully launching and effectively marketing our new product – ASAP
24. What are your plans to propel the size and reach of Namaste Credit’s business prospects?
We plan to further build our sales teams in key geographies, onboarding a larger number
and higher volume key channel partners. We will also be white-labeling our loan platform
and the ASAP product to certain strategic partners.