InvestorQ : Why is P2P lending gaining popularity in India?
vani Patil made post

Why is P2P lending gaining popularity in India?

Answer
user profile image
Manisha Mehta answered.
2 years ago


For this question we must first understand the two main individuals who have skin in the game:
- The borrower
- The lender
For a borrower, the P2P lending is a breath of fresh air because borrowing money in India is still not very easy for people who either have gaps in employment or have a poor credit score. These individuals would find it very tough to get credit from the formal established lending institutions. Through P2P lending, a borrower gets a way to fund his/her requirement for personal loans or business loans by opening a large P2P lender group, which is not confined just to his/her friends or peer circle.
For a lender, P2P lending is a great investment option. This is because in P2P lending, one can use his/her idle funds to lend it to a person who needs the money at an attractive rate of interest. Online P2P lending is a great alternative if one has spare funds, to earn more returns than traditional investment options like fixed deposits, mutual funds, etc with slightly more risk. P2P lenders can be individuals and private finance providers who can fill details and become registered P2P lenders on any P2P lending platform.
P2P lending in India occurs in various forms, including payday loan, quick loan and short-term loan.
Any individual with validated credentials can give or take a loan. These loans are unsecured in nature and can be taken or given as a personal loan or a business loan. All loans attract a pre-agreed rate of interest between the borrower and P2P lender.