HomeMedia CenterP2P lenders eye larger loans as RBI proposes regulatory norms

P2P lenders eye larger loans as RBI proposes regulatory norms

Mumbai: Peer-to-peer (P2P) lending platforms will gain legitimacy and be able to compete with banks and non-bank lenders when they come under the regulatory ambit of the Reserve Bank of India (RBI), industry experts said on Thursday.

Those most likely to face competition from P2P lending, if it picks up, include small non-banking finance companies (NBFCs) and moneylenders in the business of giving small, unsecured loans for the short-term needs of their customers.

Presently, P2P platforms offer loans that are typically below the minimum amount offered by the formal financing sector. Often, they cater to borrowers who are urgently in need of money and do not have anywhere else to turn to.

As the business picks up, they can potentially offer larger loans.

“We currently provide loans between Rs.50,000 and Rs.2 lakh, which is technically above what a microfinance company provides, but less than banks or NBFCs. Once we have established ourselves over the next two years, we might want to look at larger ticket sizes,” said Bhavin Shah, founder of LenDenClub, a P2P lending platform.

P2P lending is a form of crowdfunding used to raise loans that are paid back with interest. The lending platforms are largely technology companies registered under the Companies Act and acting as an aggregator for lenders and borrowers.

Once the borrowers and lenders register themselves on a P2P website, the operator of the platform carries out due diligence. Those found acceptable are allowed to borrow and lend.

Original Source… http://www.livemint.com/Industry/vLCecqoGwD7Su1TWSfKwiM/P2P-lenders-eye-larger-loans-as-RBI-proposes-regulatory-norm.html

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping lenders diversify their investments beyond traditional investment instruments ever since.

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The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or lending simple interest. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any lending decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ lending amounts.

*This is an annualized yield and is subject to the maximum FMPP tenure, which is 5 years. P2P lending is subject to high risk and may cause an entire loss of principal.
 

*P2P lending is subject to risks. And lending decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

** Average value mentioned is the weighted average of simple interest received by lenders

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