OMLP2P Blogs

Peer to peer lending is the process of getting a loan online with minimum paperwork wherein the entire process of submission of the loan application to the final disbursement of the fund is done over the Internet. The revolution is led by innovative fintech companies and has re-defined the rules of borrowing and lending in India.

The Indian Peer to Peer lending sector currently has some highly promising players regulated by RBI that will propel growth in the industry on the basis of their well-researched credit analytical tools, a strong back-end system, collection and recovery mechanism, and robust processes. The year 2019-2020 is expected to be the year of alternative lending and investment products like peer to peer lending which is all set to revolutionize fintech in India.

1. More small to midsize lenders will enter
   For many, the rise of the P2P model opened the doors to the world of financial services. Nowadays, it costs less than ever to get into the lending niche. No need for enormous investments and staff. Even the REGULATIONS aren't as complex as the ones conventional banks go through.
   This means that the old-school financial institutions now have an army of smaller and hungrier online competitors. But despite being small, the new P2P lenders often provide better service due to recent advances in lending technology and fully automated lending processes.
2. Banks don't intend to give up
   Large financial institutions have a harder time adjusting to the realities of the digital world and it takes them a lot of time to change their gears. Slowly but surely banks worldwide will start introducing P2P functionality.
   Traditional institutions often choose to develop their own solutions instead of using and customizing the existing and tested products that are already in the market. This route takes more time, the systems often turn out slow, clumsy, and not user-friendly. This means that only the banks with a more agile approach will adapt to the market to compete against the light-on-their-feet competitors.
3. Financial inclusion for under-banked areas
   The P2P lending platform providers create better solutions to process more of the right loans safer and faster and the lenders try to tap into new markets and demographics. The smart approval processes allow serving the people who were previously undeserved in addition to providing a more flexible and fast online experience.
4. Regulations
   In September 2017, RBI issued a notification, passing a mandate for all P2P lending platforms to be registered as non-banking financial companies (NBFCs) and published a set of guidelines for P2P lending platforms.
   The FinTech industry is still very young and governments often have trouble figuring out how to work with it and regulate it. Recently in December, 2019 RBI relaxed the upper limit for lenders in the P2P platform to 50 Lacs from 10 Lacs. This is a welcome move from the regulator. Hence it's safe to say that in 2020 the authorities will be far more focused on P2P lending.
5. The go-to choice for younger audiences
   In India, over half the P2P market is comprised of people aged 22-42. Young people don't want to deal with stuffy corporate/financial organizations and choose the more user-friendly, paperless and online options.
   In addition to that young people often simply can't get a loan on decent conditions from conventional lenders. Mostly since they simply don't have the financial or credit history which the baby boomers have. So, the trend of millennial borrowers preferring the P2P lenders will continue.

The future of the peer to peer lending platforms is bright, there is a huge untapped market for lending which is expected to touch $ 10 billion by 2025. There are still 0.5 BILLION unbanked people in India with no credit bureau score, but the technology has made it possible to change the scenario for better for these borrowers. Start with Peer to Peer (P2P) Lending in India with the most trusted P2P platform www.omlp2p.com.