P2P lending: An overview of Indian P2P lending platforms

In this age of sophisticated technology and rapid economic growth, India still has a largely unbanked and underserved population by the country's financial institutions. With more than 50% of the population with no access to formal funding, the country has largely been reliant on borrowing from friends and family, community, or the private money lenders.(Source: RBI)This is where Peer-to-Peer (P2P) Lending comes in rapidly growing Indian economy. P2P platforms provide the same facility with the help of technology thus enabling a much wider network of borrowers and lenders, and a win-win situation as the lenders earn more than the average return on bank deposits while the borrowers get cheaper funds. Present study compared P2P lending practices of 5 out of 36 P2P lending platforms in India and concluded that the adoption and reception of P2P lending in India has been tremendous from the public given the number of borrowers and lenders registered on P2P lending space. The study however found that there is supply demand mismatch as conservative lenders stay away from these platforms due to certain legal issues which need to be addressed by regulatory authorities in India.