The P2P lending market in India
The Peer to Peer lending Indian market has been on the rise for quite some time. In fact, the first P2P lending service providers have been active in the country since early 2014. However, there was no regulation until 2017. It was late in September 2017 when RBI (Reserve Bank of India) notified that the peer to peer lending platforms in India will be registered in the form of non-banking financial companies. They even provide a set of guidelines for how these companies can register and operate within the legal boundaries.
At this time India has 30 online Peer to Peer lending platforms. Some great examples are Lendbox, I2funding, Faircent and many others. RBI has stated that the NBFCs (Non Banking Financial Companies) are non-banking institutions. They are seen as what they are, which is a peer to peer lending platform.
Indian market size
Everything from P2P money lending in India to actually using this to grow a business has managed to make the industry grow exponentially in the last few years. In fact, the estimated P2P lending that will be generated in India during the next 5 years will be around $4 billion. The market is not as powerful when compared to China where the current market value is around $100 billion and rising. But it’s definitely getting there, with more and more people as well as companies being interested in this concept.
While we have around 30 platforms in the P2P money lending India sector, the market needs to expand and grow. Investors are already spending millions of dollars to get these platforms off the ground. While there’s not a lot of data due to private investment opportunities and no public options, it’s important to note that more and more investors are seeing P2P lending in India as the future of getting projects done while also allowing profitability for investors too. The investment process is robust, easy to adapt and fully customizable, which is exactly what they really need in a situation like this.
Indian market evolution and forecast
As we mentioned above, we expect the market to grow quite a bit, up to $4 billion in revenue in the next 5 years. That being said, the market can easily expand well beyond that. It all comes down to how many investors will start coming to these platforms. And it’s also important to know how many investors will RBI accept in a situation like this. The more investors will arise, the better the results can be and that definitely says a lot about the process and the growth experience itself, which is what matters the most.
There are some great changes that take place in the industry right now. The companies can report any borrower delinquencies to CIBIL, they can also access the CIBIL data that helps with credit analytics and evaluation. The investors are also becoming more interested in this kind of opportunity because it’s extremely helpful, valuable and the risks are way lower. That really matters a lot especially in the case of opportunities like this. Many Peer to Peer lending Indian companies are focused on the small and medium-sized companies as they are the ones to become a flourishing and very important segment in the entire process.
The top 5 players in India
With 30 companies already registered and working for the P2P lending India industry, it’s important to note that there are some great lending options in case you need any. Each one of them comes with some great opportunities and the features themselves help a lot.
Some of the top companies are Faircent, OMLP2P, MOnexo, I2I Funding, Finzy and Peerlend. But there are some other noteworthy examples like AnyTimeLoan.com, Paisadukaan, LiquiLoans and many others. It’s one of the most challenging sectors but it also becomes a very rewarding one given the right opportunities. And that’s the main attraction in an industry like this.
The main benefit is that the process is very simple. P2P lending Indian platforms offer lending with a starting investment amount as small as Rs 5000 ($ 70) and you can go upward from that if you want. There’s also the option to diversify your portfolio with unique systems that help you adapt and adjust to the process in a way that’s meaningful. The debt to income ratio can grow quite a lot, at this point for many lenders it will be around 33% or sometimes more (or less).
Invest in the P2P lending Indian market from Europe
Indian P2P lending companies are allowed to receive investors from all over the world. It’s important for the company to invest in projects from India. However, investors can arrive from all over the world. While these companies are obviously targeting Indian investors, you can still invest even if you live in Europe. There aren’t major restrictions and the process itself is fully customized to provide a much better value and quality as a whole. One thing to note about P2P lending India is that it will end up having better opportunities than European platforms at times because there are more ongoing projects. So yes, as long as the platform allows European users you can use them. And more often than not they will be ok with that.
The future of peer to peer lending in India
The Indian P2P lending market is growing and there are no signs of stopping. Every company is trying to attract investors with great ROI options. And in the end we can expect more and more companies to appear in this sector. Combine that with the fact that the industry is now regulated and it functions as its own thing, so you can easily see that this might very well become the future of lending. Challenges can still arise, true, but the potential is exciting and we can see this become one of the best ways to fund major projects in India!