Helios P2P is Sri Lanka's first peer-to-peer lending platform. They're looking to change the lending in landscape in Sri Lanka by enabling a secure platform for peer-to-peer lending, backed by some impressive tech.
Helios uses machine learning to grade borrowers and blockchain to secure the data. They were one of the winners of last year’s John Keells X Startup Accelerator program, and over the past year they’ve been mentored and assisted by JKX, finally launching the platform a few weeks ago.
Why P2P Lending?
Sri Lanka has 1.35 million credit card holders (Business Times, April 2018) who collectively owe commercial banks Rs.78.8 billion (that’s right, with a B).
Those numbers imply two things: one in every twenty people in the country has a credit card, and that each card-holder on average is in debt to the bank through the credit card alone at an astounding Rs.581,540. The current interest rates charged by banks on credit card debt ranges anywhere between 20% – 28% per annum, which, based on the previously mentioned average cardholder debt can come in at over Rs. 10,000 per month.
This is where Helios’ peer-to-peer lending value proposition comes into play by connecting borrowers with potential lenders, offering the latter lower annual interest rates, while giving the lenders higher returns for their money than current fixed deposits.
How Does It Work?
Despite their sophisticated backend processes, Helios is quite straightforward to use for both the borrowers and lenders.
Borrowers will have to follow a simple registration process and provide the required documents as mentioned on our site. As part of the verification process, the team gets in touch with the prospective borrowers. On the basis of these documents (which involves getting a credit report), every borrower will be identity-verified, credit-checked and risk-assessed using a model created by Helios integrating Machine Learning and AI. Helios risk grades the borrowers into 5 categories (A,B,C,D,E), ‘A’ being the borrowers with the best credit profile and ‘E’ being the category of borrowers who include those seeking microfinance loans.
Once the loan is listed, lenders can view the listing and send proposals to fund it at the given interest rate. All proposals are accepted on a first come first serve basis. Bank account details of the borrower will be provided to the lender once both parties have agreed to the loan agreement allowing the lender to transfer the funds to the borrower’s bank account.
The maximum borrowing amount is capped at Rs. 500,000 at the moment with repayment periods of 1 to 18 months. Interest rates will be within 13% and 30% p.a (the borrower’s interest rate will differ according to the risk grade and the repayment period chosen by the borrower).
Investors, on the other hand, will have to follow a simple registration process with no fee. Once the registration is complete, the investor can start to filter the borrowers using the Helios advanced filters. Loan listings are visible on the investor’s dashboard along with relevant financial and credit details of each borrower. Investors can use this information to make an informed choice to fund the borrower.
Peer-to-peer lending is still a new concept here in Sri Lanka, but it makes a lot of sense once you look at the debt figures. Helios could potentially relieve borrowers of the compound interest burden they face, while offering a viable alternative to FDs for investors.
This is only a quick summary of what Helios P2P brings to the table. If you’re interested in signing up as either a lender or a borrower, all the information you need is on their website – www.heliosp2p.com.