Wealth guide: Fixed Maturity Peer-to-Peer Plan (FMPP), a new-age term-based P2P plan that offers investors expected returns of 10-12%, is a non-market-linked investment offering introduced by LenDenClub, a P2P lending platform. The company aims to onboard one million investors and clock-in an AUM of Rs10 billion from FMPP by the end of FY23.
“FMPP is a pioneering, customer-first investment offering in this era of low FD rates and volatile stock-market conditions. It has a completely new algorithm for capital allocation,” said Bhavin Patel, Co-founder & CEO, LenDenClub, while explaining the plan.
What is FMPP plan?
The FMPP investment plan is a term-based investment plan with flexible tenures of 1, 2, 3, 4 or 5 years. The invested funds are reinvested several times throughout the tenure, thus giving the investors the power of compounding along with an annualised yield of up to 12.21 to 15.25% p.a.
A non-market-linked alternate investment option
FMPP is a non-market-linked alternate investment option which makes it immune to the risks of capital erosion on account of market volatility. Therefore, it offers investors enhanced returns along with an added layer of protection to their invested principal. Further, because of the product construct, it competes with other fixed income assets classes like FDs, Gold Bonds etc.
How FMPP works?
FMPP is a fixed investment plan, wherein long-term lock-in facilitates the compounding to kick-in, and thereby improves the yields over the due course. With a higher annualised yield of up to 12.21 to 15.25%, coupled with the power of compounded interest of stabilised returns and marginalised NPA, one can potentially double their investments in FMPP in about 6-year time, as per the RBI-approved NBFC-P2P.
“LenDenClub’s FMPP investment plan is truly an ‘alternative investment avenue’ for all classes of investors, whether retail or HNI. Technology is at the heart of everything we do. By introducing key technology-enabled features such as hyper-diversification, auto-investment, and reinvestment into our platform, we are eyeing to drive a pivotal shift in the way investments are planned and executed, especially by the younger and tech-savvy audiences,” Patel said.
With the current investment landscape, beset with high inflation and market volatility, FMPP adds a new paradigm of stability and transparency, which has assumed precedence by far, among investors, said LenDenClub CEO.
Minimum and Maximum investment
While the minimum investment is Rs10,000 per investment, the structure of the plan enables investors to open multiple FMPP accounts with the total portfolio value not exceeding 5 million which is in line as per guidelines set by RBI. Auto investment and portfolio optimisation offered through an enhanced app experience makes FMPP an indispensable investment option for smart investors.
“Our single-minded focus is to ensure that over 99% of our investors earn stabilised returns of 10-12% p.a. The newly refined algorithm adds a high degree of certainty to this core product proposition and substantiates our ethos of trust, transparency, and stability towards our customers.” added Patel.