By Leandra Monteiro
P2P lending platform, LenDenClub, has introduced FMPP, i.e. “Fixed Peer Maturity Plan” – a new term-based P2P plan that allows investors with expected returns of 10-12% per annum for a minimum of ₹10,000 per investment. The company aims to onboard 1 million investors and generate AUM of ₹10 billion from FMPP by the end of FY23.
LenDenClub, an RBI-approved NBFC-P2P that serves over 2 million investors, has designed the FMPP such that an investment amount is hyper-diversified across a large pool of borrowers, whereby the rate of default is significantly minimized, thus offering investors risk – mixed returns. The new AI and ML-based algorithms are more powerful than before because they have been refined and trained on proprietary data acquired by the company since its inception. This allows FMPP to offer hyper-diversification as a unique feature that mitigates risk and provides stability of returns.
LenDenClub’s FMPP Investment Plan is a term investment plan with flexible terms of 1, 2, 3, 4 or 5 years. Invested funds are reinvested multiple times throughout the term, giving investors the power to capitalize with an annualized return of up to 12.21-15.25% pa FMPP is a non-market alternative investment option which makes it immune to the risks of capital erosion due to market volatility and therefore provides investors with enhanced returns as well as an additional layer of protection for their invested capital. Additionally, due to the construction of the product, it competes with other fixed income asset classes like FDs, Gold Bonds, etc.
When the FMPP was launched, Bhavin Patel, co-founder and CEO of LenDenClub said, “FMPP is a pioneering, client-focused investment offering in this era of low FD rates and volatile market conditions. It has a brand new capital allocation algorithm. It’s been in development and testing for 18 months and it’s finally live. LenDenClub’s FMPP investment plan is truly an “alternative investment path” for all categories of investors, whether retail or HNI. Technology is at the heart of everything we do. By introducing key technology-based features such as hyper-diversification, auto-invest and re-invest into our platform, we envision bringing about a sea change in the way investments are planned and executed, by especially by younger, tech-savvy audiences. With the current investment landscape plagued by high inflation and market volatility, the FMPP adds a new paradigm of stability and transparency, which has by far prevailed among investors.
“Our goal is to ensure that over 99% of our investors achieve stabilized returns of 10-12% per annum. The newly refined algorithm adds a high degree of certainty to this core product proposition and vindicates our ethic of trust , transparency and stability vis-à-vis our customers,” he added.
The FMPP is a fixed investment plan, in which the long-term lock-in facilitates the triggering of compounding and thus improves returns over time. With a higher annualized return of up to 12.21-15.25% coupled with the power of compounding interest from stabilized returns and marginalized NPA, one can potentially double their investment in FMPP in about 6 years. While the minimum investment is ₹10,000 per investment, the structure of the plan allows investors to open multiple FMPP accounts with a total portfolio value not exceeding 5 million, which is in line with the guidelines set by RBI. Automatic investing and portfolio optimization offered through an enhanced app experience make FMPP a must-have investment option for smart investors.
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