InvestorQ : How 5paisa P2P lending is relevant for lenders?
Dawn Cherian made post

How 5paisa P2P lending is relevant for lenders?

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5Paise Expert answered.
3 months ago

Well, that is a good question, as the one who benefits the most under the said scheme is the lender. Let me explain how:

-Markets are highly volatile: During the times when equity markets are highly volatile, yields on bonds are falling and even the real estate sector has been in grief, this will surely emerge as one of the best ways of making an investment with improved risk management tools.

-Regulated Platform: 5paisa P2P platform is a regulated one as it is overlooked by the guidelines of RBI. It has set some clear regulations relating to capital adequacy of lenders, loan limits, exposure limits for a single borrower, and a limit on cash transactions. Therefore, investors are ensured that the 5paisa platform is safe.

-Simple and effective: 5paisa focuses on making it very simple for investors to get associated with the platform. Very minimal paperwork is involved since most of the loan documentation is entirely online and hence 5paisa makes sure that investors get the best facilities at a low cost. The platform relies solely on the use of technology to execute loan deals.

-Higher returns: While the entire market is volatile, the lenders can earn higher returns through the platform that goes to a maximum of 27-30%. The borrowers registered on the platform are grade registered based on their credit rating. While high credit-rated borrowers could borrow at the rates 14-15%, low rated borrowers get loans at about 25-30%. Therefore, 5paisa focuses on providing lenders with returns that are attractive and better than the market.

-Diversification of risk: The 5paisa platform diversifies the risk for the lender in 3 ways. The platform uses technology to classify borrowers, this allows lenders to spread their money across various classes of risk holders.
Therefore, it is beneficial for the lender in all respects, except the risk involved shall be minimized and not eliminated.