Can your monthly rent payments earn you rewards and loans? See what RentenPe offers | Mint

Are you prompt in paying rents to your landlord? If you are consistent with rent payments and live in Mumbai, you would be able to avail loans on that basis alone soon. Regular payments would also earn rewards, a rent credit score and a Residence Card (R-Card) that would store all the information about your rentals.

In a bid to “reshape” India’s rental market, Mumbai-based RentenPe is launching what it claims is the country’s first ‘Rent Credit Score and R-Card’. “Despite the regularity and significance of rent payments, they remain unacknowledged in traditional financial metrics. Unlike credit card payments or loan EMIs (equated monthly instalments), which contribute to building a positive credit score, rent payments have historically been overlooked, leaving renters without the financial recognition they deserve,” says Sarika Shetty, founder of RentenPe.

How will it work?

If you have rented a property in Mumbai, all you have to do is log on to the RentenPe app to avail its services, which during the launch is free of cost for tenants. You have to provide all the basic information including your Aadhaar ID, PAN card and details of property rented. You have to upload your rental agreement along with a recent photograph. RentenPe will then check the rental agreement with assistance from its legal partner. Since about 90% of the rent agreements in Mumbai are registered, RentenPe will not face much problems in validating rent agreements, Sarika says.

Once the customer’s credentials are verified, RentenPe will provide the R-Card, a 12-digit card that will store information about rent payments. Individuals paying a rent of ₹10000 to ₹2 lakh per month can use the RentenPe app. But rewards for prompt payments will be available only for those who spend in excess of ₹20000 per month on rent.

To start with, R-Card holders will have a rent credit score of 650, which can go up to 790 if rents are paid promptly. Once a tenant gets a rent credit score of 790, she/he would even be able to qualify for a housing loan. RentenPe has tied up with NBFCs (Non-banking finance companies), which would offer loans to tenants. RentenPe has also tied-up with about 300 brokers in Mumbai for the app.

What are the benefits?

Apart from the R-Card and the rent credit score, tenants will be able to pay their monthly rents through RentenPe. The app has tied up with prominent payment gateways that will allow tenants to pay rents through their debit cards, credit cards and UPI (Unified Payments Interface). If you are prompt with your payments, you will be able to earn rewards that can be up to 1% of your monthly rent.

For example, if a person spending ₹50000 per month on rent makes payments promptly on a consistent basis, she/he will be able to earn rewards of up to ₹500 every month. In some cases, RentenPe will pay up to one month’s rent as a reward. It will also provide rental receipts for all the payments. Regular rent payments will also make you eligible for a rental loan. You can also avail loans based on the security deposit for the rent on the app.

How does the model work and will it be viable?

RentenPe says that there is an untapped potential for providing finance based on rent, which accounts for about 30% of a person’s regular income in tier-1 cities. “We believe that rent, a significant monthly financial commitment, should be recognized in the same way that EMIs and credit card payments are. Our ‘Rent Credit Score’ and ‘R-Card’ are designed to empower tenants, giving them the financial recognition they deserve and helping them achieve their long-term goals, including home ownership,” Sarika says. 

India’s residential rental market, pegged at ₹1.85 lakh crore during 2021 across the top-7 cities, is expected to grow at a compound annual growth rate of 8%-10% in the next five years, according to EY Parthenon, the strategy consulting arm of global consultancy firm Ernst & Young.

About 4.05 crore persons stayed in rented accommodation in the top-7 cities as of 2021, which accounted for nearly 35% of the total population in these cities, according to EY Parthenon. In Mumbai Metropolitan Region (MMR), nearly 76 lakh people out of a total population of about 2.8 crore were living on rent as of 2021. RentenPe, which is launching in Mumbai and later plans to expand to other cities, will get a fee or commission from NBFCs and payment gateways.

Allirajan M is a journalist with over two decades of experience. He has worked with several leading media organisations in the country and has been writing on mutual funds for nearly 16 years.