Friday, 5 February 2016

Four predictions for P2P Lending in 2016 for India

Peer-to-Peer Lending has been growing slowly over the past few years. This concept is starting to be recognised by individuals.

While it is still growing, we believe that 2016 will be an important year for P2P Lending.
Here are some predictions regarding it:

  1. Regulations: As Peer-to-Peer Lending is slowly becoming more and more popular across the globe as well as in India, it has caught the attention of the RBI. P2P platforms in various countries are regulated by their respective regulatory agencies. In India however, no regulations are in place yet. That may change this year. The RBI is currently studying the system thoroughly and we can expect regulations to be released later this year.
  2. New Entrants: Slowly, more and more firms are joining this industry. P2P Lending is becoming more popular every week and as the number of firms is growing, so is the amount people are talking about it. There currently are very few players in the market but that is beginning to change.
  3. A Serious Asset Class: With P2P Lending gaining popularity by the day, investors will be forced to consider Peer-to-Peer lending as a serious asset class. As P2P Lending becomes more mainstream, investors will gain confidence and there will be more inflow of capital into this industry. Along with private investors, many large institutions are also getting involved lending to SMEs.
  4. Fall in market rates: With so many investors and borrowers completing loans in a secure and regulated way, there will be a lot of competition for prevailing rates in the market. This will force the market rates to fall, greatly benefiting the borrowers as their cost of acquiring a loan will become less.

While these predictions are based on various prevailing factors in market, they are still just predictions. We will have to wait and see what this year has in store for us. 

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