Friday, March 24, 2017

i2ifunding - UBER for a quick loan and high fixed returns!

This is a post for the savvy investors! the investors who really want to make their money work hard and enjoy the returns!! the newest financial product in the block!! and you must know about it!!

Are you a comfortable investor with diversity in mind? Have done some investments in Equity, mutual funds, and fixed deposits? You will be pleased to know that there are few more investment opportunities opening up your way with some interesting #alternate-investment options.

One such concept I came across last week and wanted do a basic research before sharing with you all. After checking online, I realised, the concept is globally recognised. The concept is peer to peer lending. Globally a well-known concept, it is slowly but steadily catching up in India, RBI has already published consultation paper on the same.    

What is peer to peer lending?
It is an easy concept of lending and borrowing, where the investor and the borrower both are individuals and not institutions like Banks or Non-banking finance companies. P2P lending in  India concept thrives on high income for investors on unsecured personal loans. #i2iFunding is one of the first movers in this space.These platform focuses on high vigilance and smooth interface.

How does it work for the investors?
Investors need to do a simple registration on
  1. Registration - A simple form needs to filled including personal details
  2. Register as an Investor – Upload profession details, and upload address proof and PAN Card for verification purposes
  3. Review pre-approved loan projects – #i2iFunding only reflect the loan projects which ae pre-verified by the team basis the borrower profile and requirement. The loan request of the borrowers are verified by proprietary credit-score model and recommend interest rate
  4. Wallet  - The investor can start investing from Rs. 5000 and multiple of 5000 upto Rs. 5 lakhs
  5. Physical verification and documentation Once the loan approved by the borrower, i2i funding does a physical verification followed by signing a legal contract. Investor has to provide undated cheque equal to EMI amount for each investor. #I2ifunding shares the digital copy to each investor.
  6. Transfer funds and receive payments from next month – After all the legal formalities, investor needs to transfer funds directly to borrower’s account, and repayment starts next month onwards.
  7. Building a portfolio – Investors can give multiple loans and as per his risk appetite and earn monthly returns. ‘My Account’ section helps track investment details
Benefits for the investors-

  1. Diversify portfolio with high fixed income
  2. Freedom to chose loan projects based on risk apetite and return expectations
  3. Cap on funding each borrower at 20% of the loan amount, reducing over-exposure, concentration and mitigating risk
  4. Capital protection guarantee for the investors subject to the risk profiles of the borrower's of the loan projects  (investing in loan projects of cat A borrower has highest protection)

Process for Borrowers-
Once you are registered,
  1. Create a borrower account – Register with your personal details, income detail, employment status etc
  2. Loan assessment by i2i – 40 parameters including education background, CIBIL Score
  3. Make loan live on i2i funding website – Post the assessment, make your loan live on i2i platform
  4. Get funding commitment from Investors – Registered invetors across India can see your requirement and apply
  5. Physical verification and documentation -  i2ifunding will do verification of original documents, you also have to share 3 EMI cheques for investors to hand over
  6. Loan disbursal and repayment – Once the verification done, lenders will directly transfer the money in borrower’s account and borrower need to start repaying from next month

Benefits for the borrower
  •        Low Interest rates
  •        Quick hassle free process
  •        No pre-payment penalty
  •        Funding in few days
Borrowers are categorised based on their credit profile, employment status and few other criteria. The category A-F reflects the credit profile order, A denoting the safest category and F is for the riskiest category. With increase in risk category, cost of borrowing increases which is illustrated in the table below.

Charges you need to keep in mind - 
Create a borrower account
Rs 100
Create an investor account
Rs 500
Increase in the wallet
- Nil up to first Rs 50,000
- 1% for additional increase
For Salaried Borrowers
Loan processing fee payable before physical verification. (Minimum processing fee is Rs 2000)
Risk Category
% Fees

For Self employed Borrowers
Loan processing fee payable before physical verification. (Minimum processing fee is Rs 2000)
Risk Category
% Fees

Other Charges

In case of prepayment
No Charge
In case of change in loan amount before receiving any funding commitment post listing
Rs 100
In case of change of bank account details
Rs 200
Rs 200

My take - It is an interesting #alternate-investment option, with stringent guidelines. However, it is new in India. Investors with moderate to high risk appetite can look at it. One may look at borrowers with high ratings like A-D for good yet safe return on investments.

Checkout the website for partnership program too!!

Saturday, March 18, 2017

Shout out to HR Teams - Save some tax for your employees with Zeta Optima

Looks like a dream come true offer for the employees! The days of punching the bunch of colleterals while submitting the reimbursements seem over! I found this info and sharing as is, as it looks very interesting but only HR personnel would be rightly placed to evaluate and take it ahead.

HR TEAM needs to look at this - 

These offers can help save tax and resources for both employees and employers.

(Information sourced from ZETA - Information included as is)

The Zeta payment suite gives users access to over 11 lakh outlets and can be used to make online payments as well.

Zeta Optima is fully compliant with the Income-tax act and RBI guidelines. It's the only solution that has been certified compliant through a written opinion by every one of the big 4 Accounting firms: KPMG, Ernst & Young, PriceWaterHouseCoopers and Deloitte.

Optima is used by over 70,000 users, across 600 organisations that:
       have eliminated paper while managing employee benefits
       send grants instantly to employees
       outsource claim verifications
       customise the programme and set usage rules
       generate on-demand digital reports
     receive audit-ready statements

The Optima suite of smart benefits includes:

Optima Meal Vouchers
An electronic meal voucher programme that replaces non-compliant paper vouchers and meal cards, with a 100% compliant, fully digitised solution. Optima Meal Vouchers can be spent via the Zeta app and the Super Card at 3 lakh+ outlets and can help your employees save up to Rs 11,880 every year. Optima Meal Vouchers can also be spent at office cafeterias with the Zeta Super Tag.

Optima Medical Reimbursements
The first fully digitised medical reimbursements programme in India, Optima Medical Reimbursements lets employees file claims on-the-go via the Zeta app. Through Optima Medical Reimbursements, employees can save up to Rs 4,500 in taxes, every year. Optima Medical Reimbursements grants can be spent via the Zeta app and the Super Card.

Optima Fuel & Travel Card
A digitised solution to manage fuel and transport expenses, employees receive grants from their organisations on their Optima Fuel & Travel Card. The balance in this virtual card can be spent at any fuel or vehicle maintenance station via the Super Card. Employees also have the option to upload bills via the Zeta app and file for fuel or transportation reimbursements. Employees can also use the Fuel & Travel Card to file claims against costs incurred during their commute to work. On the whole, employees can save up to Rs 11,880 in a year.

Optima Communications Card
The Optima Communications Card is a digital solution that helps users save up to 30% in taxes on communications bills. Employees receive their communications grants on their Optima Communications Card, which they can use to pay mobile, landline, data card and internet bills via the Zeta app.

Optima Gadget Card
The Optima Gadget Card not only allows employees to save up to 30% in taxes on the purchase of gadgets, it also helps organisations save tax on the gadget’s depreciation. Employees receive grants to purchase gadgets in their Optima Gadget Card, which they can either claim on a monthly basis or accumulate to purchase a gadget at the end of the year with the Super Card or via the Zeta app.

Optima LTA Card
Definitely the most compliant LTA programme out there, the solution is the first digitised LTA claims platform in India. Optima LTA Card ensures your claims are in line with all compliance guidelines and gives organisations the flexibility to outsource verifications of travel documents to Optima. Employees can upload relevant documents via the Optima LTA Card on the Zeta app and receive reimbursements. They can save up to 30% in taxes with the Optima LTA Card.

Optima Gift Card
With the Optima Gift Card, employees can receive tax-free electronic gift vouchers of up to Rs 5000 in value from their employer. These gift vouchers can be spent at over 11 lakh outlets and online through the Zeta Super Card or the Zeta app.

Optima Books & Periodicals Card
Designed to encourage, sharpen and develop new skills, the Optima Gift Card is a digital solution to claim reimbursements on journals, reading materials, books and more. Employees receive grants in their Optima Books & Periodicals Card, which they can spend using the Zeta Super Card. Through the Optima Books & Periodicals Card, employees can save up to 30% in taxes.

Optima is built to be comprehensive, it can be tailored to include any tax perquisite that a company may wish to offer. It is also flexible, allowing organisations to customise how each programme is implemented.

This table will give you a break-up of how employees under different tax brackets can save maximum amount of tax:

Wednesday, March 15, 2017

'1 Crore' - the new catchword in health insurance

The buzz word first introduced by Mr. Amitabh Bachchan, Kaun Banega Crorepati, in the beginning of this millennium had opened a dream world for the common Indians. However, it took sometime for us to sink in and consider the figure as a real achievable target. Until the early last decade till about 2005 to be precise, 1 crore was not even distant dream for most of us. Indian population was very happy with endowment plan for 1-5 lacs rupees and felt content with the 'suposedly' financial planning. Then came the disruption! hail the magic word Rs. 1 crore. 

Insure for 1 crore
The two new words changed the financial services of India forever. The two words were 'Term plan' and 'SIP' - systematic investment plan. 
The 'term plan' the true insurance product came in force in India in early 2000. The product came frill free sans the investment component. So, the newly formed private insurers began launching term-plans of 10 lakhs, 25 lakhs, 50 lakhs, 75 lakhs and 1 crore for a fraction of  a cost which LIC sold its' endowment policies and the newbie ULIPs. The country reacted in disbelief! It took a decade, but 1 crore has became a new normal of Indian middle class, thanks to to the term insurance plans.

SIP to 1 Crore
Not to forget the aggressive promotion of 'SIP' by mutual fund companies harping on 'power of compounding' often projected 1 crore as target figure. Be in advertisement on personal finance stories, saving a few thousand rupee every month for 20 years could yield 1 crore was used as a magic figure in numerable instances catching the fancy of Indian salaried class. 
Now - Health cover for 1 crore
However, this wasn't yet the case for health insurance industry until recently. Rs. 3 lakh to 20 lakh at the premium side was a common norm until about 2 years back. However, the healthcare cost of India has multiplied over last few years and surging way ahead of the inflation numbers. Incase of critical illness, one may have to cough-up upto INR 25-30 lakh easily only on the treatment procedure, let alone the aftercare and other financial loss causing a big dent on the resources. So, looking at the surging medical expenses and preempting the future trends, the insurance companies have launched premium insurance products with higher sum insured from 50 lakhs upto 6 crore even above. Though the product positioning may look premium, including very specialized services like global hospitalization benefits, maternity cover, organ donation etc. But eventually these services are aligining India with the global standards of healthcare. Though the premium of the products are on the higher side for now, the 1 CRORE is becoming a new normal for the health Insurance Industry too!

The few products in this category  - 
CARE Global - Religare Health Insurance
ProHealth - Cigna TTK

Apart from these, many companies do provide fixed benefit insurance for persona accident and insurance for critical insurance.

Monday, March 6, 2017

Financial Inclusion - A Mission and A Revolution!

The term ‘financial inclusion' reminds me of the first ethos of democracy that is ‘equality', equal treatment, equal opportunity and equal availability of resources. It simply means providing financial services at a minimum cost to sections of underprivileged and low-income segments of society, making all individual contributing to the economic growth.

If we go by research reports, India stood in the bottom few countries in financial inclusion until 2011, which caused financial disparity and uneven growth, a major setback for the developing nation. However, the recent multi-layered approach towards financial inclusion indicates a strong step towards eliminating this socio-economic hindrance. According to World Bank data, around 2 billion people in the world don't use or have access to formal financial service and about 50% of the poorest households are unbanked. The experts believe, the inclusion of these unbanked population would reduce the economic inequality, World Bank aims to complete Universal Financial Access (UFA) by 2020.

The India Scene: Though the term was coined in the year 1994, the history of financial inclusion goes back to the pre-independence era of the first foundation of the modern banks. As time rolled, India, a new democracy did its own bit to include the poor and deprived population to include in the financial system. However, the history of banking in India had its image deep-rooted in Indians as ‘for rich and wealthy', which restrained the poverty-stricken less privileged to knock the door of banks. They kept relying on unorganised money-lenders who preyed on the poor. Few major steps in this era included nationalising the banks between 1969-1980. It was only the first step towards a long marathon. This era also built the foundation of RRBs (Regional Rural Banks), formed to serve the large unbanked population of rural areas and promoting financial inclusion. 

The year 1991 marked the new wave of liberalisation reforms in trade and economic policies in India, which also brought the private banks into existence. The process of opening branches in rural India, however, remained slow. 

Real Growth: For long, banks ignored the remote and rural areas of India to focus on their profit and keeping their costs in check. RBI played a catalyst in the modern reform by permitting banks to engage business facilitators (BFs) and BCs as intermediaries for providing financial and banking services, also known as Bank Mitra. To further penetrate rural India, RBI simplified branch authorisation in December 2009, allowing domestic scheduled commercial banks to freely open branches in tier III to tier VI towns and villages with a population of less than 50,000 under general permission.

In the last decade, India has witnessed a paradigm shift in the approach of financial inclusion, from a social responsibility it has turned into a full-fledged ‘mission'. The true essence of financial inclusion is reflected in the series of initiatives under the leadership of PM Narendra Modi. Keeping up with the demand of millennial generation and new economic environment, financial inclusion is now not limited to opening bank branches in rural areas and frill-free bank accounts. There have been multiple action parallely undertaken like a revolution to reach the goal. Besides direct approach, the government also facilitating other institutions in their efforts and keeping up with the need of modern financial reforms. 

Year 2011 onwards
The series of new initiatives are compelling the unbanked population to open a bank account and link it to Aadhaar and PAN to receive government subsidies and other assistance. It is not a one-time approach, but the persistent effort can be seen through action at multiple levels attacking the root cause.

During the period 2011 – 2015, the unbanked population of India halved from 57.7 crores to 23.3 crores, as reported in a PwC research. PradhanMantri Jan DhanYojna (PMJDY) and demonisation drive together mobilised about 26 crores of unbanked population to the formal financial ambit further lowering the number.

With PMGDY, the government also introduced term insurance policy for all, Pradhan MantriJeevan Jyoti Yojana (Rs. Two lakh sum assured for An annual premium of Rs. 330) and health insurance scheme Pradhan Mantri Suraksha Bima Yojana (Rs. Two lakh sum insured for a premium of Rs. 12). The Adhaar linked accounts now can also be used for UPI with a smart phone or even feature phones (mobile wallet). To encourage the unbanked population, the consistent efforts are made through the demonetisation drive, direct subsidies and now monetary assistance for pregnant women in the underserved population amongst other. The regulations in microfinance business over last decade have made financial services affordable for the poor. The introduction of payment banks and small banks only ensures a better reach to the rural and remote areas without proper infrastructure facility.

A recent research report by BCG mentioned India to be making the fastest progress in the financial inclusion drive. Including digital mode of banking in the base level is expected to further strengthen the movement as the number of mobile users exceeds the bank account holders with a high margin. Given the infrastructure and resource constraints, digitisation drive will make rural banking viable and efficient.

Communication: The recent moves of PMJDY account and demonetisation was well covered by all media outlets and PM intelligently used media for the benefit of the nation especially with his ‘Mann ki Baat' on radio and announcements on national TV Doordarshan. Going further, communication will play an important role. Experts will agree, India, the country with the world’s second largest population is known for its diverse culture and socio-economic system. As the focus is to reach the rural and remote areas and include them in the financial system, the communication tool and strategy need to merge with the local flavour while keeping the key message intact. The localisation of communication strategy efforts will further improve the trust of the rural to only open but transact and maintain their bank accounts for their own benefits.

If we think logically, the common mass media used for the tier-I cities would be quite irrelevant for the tier-II and below, however widely it can report the issue. For an effective communication programme, three major aspects would be: 1. Targeting right Influencer group 2.Choosing the right platform/ tool and 3. Designing the key message.

Choosing the right Influencer group will be as important as the messaging. The village communities are largely influenced by their Panchayat, school going or educated children, teachers, doctors, postmen and local heroes. The benefits of bank account and choosing formal financial products can be promoted in platforms like local events through plays, sponsorship programs of self-help groups, training children in the government schools, training volunteers to spread the message in the community etc. Sharing a digital demo should be an important element of the campaign. The content of the messaging should be touching the right cords of the rural population.

An informed society makes a better decision. So, educating them in the right direction is also a core responsibility of powers that be, apart from providing mere services. 

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