India Peer-to-Peer Lending Market to be Led by Small Business Segment through 2029

Increasing adoption of digital payments and rising demand from small and medium-sized enterprises (SMEs) are leading the India peer-to-peer lending market during the forecast period.

According to TechSci Research report, “India Peer-to-Peer Lending Market – By Region, Competition, Forecast & Opportunities, 2029,” the India peer-to-peer lending market is expected to surge substantially during the forecast period due to rapid change in payment mode and increasing demand from SMEs and start-ups. The market's growth is stimulated by an increasing number of government initiatives, rising internet penetration and high return rates.

Peer-to-peer (P2P) lending is a market that enables people to lend or borrow money without the involvement of any financial institutions, such as a bank or an NBFC, which would otherwise gain margins on such transactions. Indians have always participated in unorganized P2P lending by borrowing from friends, relatives, or even moneylenders, sometimes at exorbitant rates.

In India, P2P lending platforms in India are offering a wider range of loan products, including personal loans, business loans, and education loans. However, the India peer-to-peer lending market is relatively small compared to other countries, such as the US and China. As of January 2022, there were around 25 P2P lending platforms registered with the Reserve Bank of India (RBI).

P2P lending market is segmented into consumer lending and business lending. Consumer lending refers to the process of individuals borrowing money for personal expenses, such as education, healthcare, wedding expenses, or debt consolidation. P2P lending platforms in India facilitate consumer lending by providing a platform for individuals to borrow money directly from individual lenders. While business lending in the P2P lending market involves providing loans to small and medium-sized enterprises (SMEs) and startups. P2P lending platforms in India have emerged as an alternative source of financing for businesses that may face challenges in obtaining loans from traditional banks. These platforms assess the creditworthiness and viability of business borrowers based on factors like their financial statements, business plans, and industry analysis.

With the help of technology, fintech platforms have launched peer-to-peer lending based on advanced tech-based solutions, bringing informal lending into the formal credit framework and inside the regulatory framework of the formal financial system. P2P lending platforms in India are partnering with digital banks to offer loan products to their customers. This has helped increase the reach of peer-to-peer lending platforms and make credit more accessible to a wider range of borrowers.

Despite its relatively small size, the P2P lending market in India has significant potential for growth. With increased demand for digital financial services. The outbreak of Coronavirus pandemic specifically highlighted it, the demand for digital financial services. The use of technology has made P2P lending platforms more efficient and cost-effective. This has helped in reducing the credit cost and making it more accessible to a wider range of borrowers. The RBI has put in place various regulations to govern the P2P lending market in this country. Additionally, the RBI has recently introduced several measures aimed at improving the regulatory framework for P2P lending, which could further boost investor confidence and drive the market’s growth.

P2P lending will develop as a new investment channel for businesses seeking higher returns. It also performs better than other existing investment options. With additional protection and better returns, these platforms will also continue to grow as an acceptable option for individuals to make investments. The top five fintech companies in 2021 in terms of investment were Razorpay, Lendingkart, Policy Bazaar, Paytm, and Cred.

 

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The India peer-to-peer lending market is analyzed on the basis of type, borrower type, and region. Based on type, the market is segmented into consumer lending and business lending. The demand for capital in SMEs and start-ups is likely to propel the business lending segment during the forecast period.

Based on borrower type the market is segmented into individual, small business, real estate, and others (marriage etc.). Based on region, the market is segmented into North, West, South, and East.

 

Key market players in the India peer-to-peer lending market include:

• Transactree Technologies Private Limited (Lendbox)
• Fairassets Technologies Private Limited (Faircent)
• RNVP Technology Private Limited (i2ifunding)
• Bridge Fintech Solutions Private Limited (Finzy)
• Innofin Solutions Private Limited
• Lendingkart Technologies Private Limited
• Fintelligence Data Science Private Limited (RupeeCircle)
• Fair Vinimay Services Private Limited
• Etyacol Technologies Pvt. Ltd (Cashkumar)
• NDX P2P Private Limited (LiquiLoans)

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“The rising need for capital among SMEs and start-ups is boosting the peer-to-peer lending market in India, and the scenario is likely to remain so over the next few years. Market leaders are constantly upgrading themselves with the help of AI and ML, which is expected to drive the market over the next few years. Additionally, the increasing number of government initiatives, high demand for credit, and the growth of digital payments are projected to positively impact the India peer-to-peer lending market during the forecast period.” said Mr. Karan Chechi, Research Director with TechSci Research, a research based global management consulting firm.

“India Peer-to-Peer Lending Market By Type (Consumer Lending, Business Lending), By Borrower Type (Individual, Small Business, Real Estate, Others (Marriage etc.)), By Region, Competition, Forecast & Opportunities, 2029,” has evaluated the future growth potential of Peer-to-Peer Lending market in India and provides statistics and information on market structure, size, share and future growth. The report is intended to provide cutting-edge market intelligence and help decision makers take sound investment decision. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges and opportunities present in India Peer-to-Peer Lending market.

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