What is your view on the 12% Club from BharatPe?

With the race for providing new services using fintech, a lot of startups have come up with innovative methods to garner a following for earning revenues.

Different Facets of Finance Space

They range from BNPL(Buy Now Pay Later), Credit Cards with Unique Payment Methodology, UPI-based payments among others.

Buy Now Pay Later(BNPL) Players in India (Ref: Inc42)

In the same field of fintech, a new initiative exists in the form of – 12% Club. This is an offering from merchant payments and financial services provider – BharatPe. This is excluding the organization’s ‘Buy Now Pay Later’ (BNPL) product PostPe

12% Club Offering

It means to provide easy access to cash and also provide 12% interest to individuals who want to get extra interest on unused funds.

Working of 12% Club for Investors

The target market for the app is – Youngsters, Employed People, Self-Employed Individuals who may find it hard to get a high spending limit credit card owing to no/bad credit score or are faced with a sudden cash crunch.

Working of 12% Club for Borrowers

As the value proposition is attractive, The question now arises is

  • How does this work?
  • How does 12% Club Make Money?
  • Is the app safe to borrow/invest your money?

Let us deal with the questions, one by one:

How does this work?

12% Club taps into something called P2P(peer to peer) play. This P2P marketplace is a crowd-funded loan-raising mechanism driven by technology that matches prospective borrowers and lenders on a single platform via the Internet.

Working of P2P Lending

P2P players have been in existence since 2012, but the RBI came out with guidelines in September 2017, to convert P2P players into NBFCs by issuing NBFC-P2P licenses. There are 21 NBFC-P2Ps in India.

Difference of P2P Lending v/s Traditional Approach

How does 12% Club Make Money?

12% Club (Resilient Innovations Private Limited) partners with RBI regulated P2P NBFC like Innofin Solutions Private Limited (“LenDenClub”), and NDX P2P Private Limited (“Liquiloans”), and the borrowing is extended by RBI regulated NBFC – Hindon Mercantile Limited.

Logo of P2P Platform LIQUILOANS

P2P investors on BharatPe’s 12% Club platform will be lending to its tie-ups and in turn, they will leverage BharatPe’s payment infrastructure. In this whole process, the platform will deduct a small portion as a fee.

Is the app safe to borrow/invest your money?

Other than BharatPe’s 12% Club platform, there are others like ‘Cred Mint’ from CRED, which allows members to earn up to 9% interest by lending and borrowing at 12% to 16%.

Logo of Fintech Startup: CRED

Despite this, one should not forget that these platforms merely act as a facilitator through their tech and do not guarantee a return on investment. This should not be ignored.

As per RBI regulations, one can invest up to Rs 50 lakh across P2P platforms. The minimum amount is Rs 25,000. The RBI has specified that the tenure of a single loan cannot be more than three years. Exposure to a single borrower cannot go above Rs 50,000.

Logo of Reserve Bank of India(RBI)

Accordingly, Mobile App – Cube Wealth aids to distribute your risk across multiple borrowers.

Logo of P2P Diversifying App: Cube Wealth

Only park money in any of the P2P Platforms that you have in excess(and do not regret losing in the worst case) and do not borrow without understanding the Terms & Conditions.

Hope this helps.

You can follow my blog or Facebook page on investing for getting insight into other stocks.

Happy Investing!!


  1. 12% Club
  2. NBFC – Peer to Peer Lending Platform (Reserve Bank) Directions, 2017
  3. P2P lending startups to get NBFC tag soon
  4. 14% return in a year: P2P lending catches investors’ eyes
  5. BharatPe forays into P2P lending with ‘12% Club’
  6. Is P2P Lending In India Safe?
  7. RBI raises aggregate exposure limit to Rs 50 lakh on P2P lending platforms
  8. Should You Invest Via P2P Lending?

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