Peer-to-Peer Lending Insights

What if you could support grassroots livelihoods, and earn a small return while you’re at it? That’s what Rang De has been quietly enabling since 2008. Started by Smita and Ramakrishna, Rang De is India’s first and only peer-to-peer lending platform focused on making affordable credit accessible to underserved communities. These are farmers, artisans, women entrepreneurs etc i.e folks who are usually left behind by banks and NBFCs. Folks who often end up in the deadly trap of local lenders. Just to make it clear - It’s not charity. It’s not a donation platform. It’s credit, just done in a fairer and more transparent way. The seeds of RangDe came when Smita and Ram were in Oxford, and the stark contrast between privilege and poverty pushed them to think: What would a direct, people-powered alternative to finance look like? That seed grew into the giant tree of shelter that is Rang De today. Here’s what they’ve managed to do so far: - Roughly ₹100 crore in credit disbursed - 25,000+ entrepreneurs supported - 11,000+ individuals have come in as social investors - As an investor, you can start with just ₹500 and achieve returns around 8.5% p.a. For eg - If you lend Rs10,000, you can earn around Rs 800 p.a and impact 3-4 lives in the process. You also get to choose who you lend to and track how their journey unfolds. They started out as a nonprofit. In 2019, they became an RBI-regulated platform. And over the years, they’ve managed to hold onto something rare -- radical transparency and a genuine focus on what works for both sides: the lender and the borrower. It's a great example of how technology, when built with heart, can solve very real problems. More power to models like this.

Peer-to-peer lending in India has been around for a while but the next few years are going be super exciting! Here are some interesting social impact trends I expect in the next few years 🚀 🇮🇳 1️⃣ Empowering the most marginalised communities : P2P lending traditionally focuses on the population segments that often struggle to access credit from traditional financial institutions. In the coming years, I expect very specialised initiatives for communities that are not just financially excluded but also socially overlooked. This includes underrepresented professions, tribal and indigenous communities, people with disabilities and those who are often invisible to the majority 2️⃣ ESG: P2P lending is an agile tech offering most suitable to the upcoming trends of Environmental, Social, and Governance (ESG). In the coming few years, P2P offerings will help drive focused efforts towards these initiatives because of the ability to tailor loan products and and work with a wide range of on-ground partners including SHGs, NGOs and farmer groups. 3️⃣ Women's Empowerment and Gender Equality: P2P lending will become a game-changer for gender equality and equity especially in a country like India. This is possible because through peer to peer lending, women not only get financial access but very importantly - agency to make financial decisions. When this happens, more women are enabled to go out and join the workforce - contributing to local economies and bridging the gap between men and women. When this happens at scale, India's GDP will skyrocket and P2P will play a major role. 4️⃣ Fiscally responsible behaviour : P2P lending gives an opportunity to educate large sections of society around the principles of responsible financial decisions. This majorly begins with responsible lending that gets normalised on the community level and prioritises healthy saving habits for families and decision makers. In the coming years, this will lead to the creation of a mature population base that will move on to more sophisticated financial products.   5️⃣ Education and health : When P2P lending succeeds, one of the first thing it facilitates is expenditure on non-agri and non-livelihood expenses. This means families get access to increased incomes to spend on health and education. This adds to increased life expectancy, more lifetime earnings and a potential for generations to escape poverty P2P lending is not a magic bullet but an amazing catalyst for underserved communities. Together with the right partners and government support, this space can create a more equitable and inclusive future! 🤝 #P2PLending #SocialImpact #FinancialInclusion

RBI didn’t kill P2P lending. It cleaned it up — and that’s good news for investors. Last year, RBI issued a circular with guidelines which became not just a compliance burden, but also an operational headache for most platforms. In fact, the whole of last year, we stopped hearing anything about P2P — Cred shut its platform. So did BharatPe But that’s not the full story — and for investors, it may actually be the turning point. Some licensed players came out stronger. ALT Investor went behind the scenes and dug into two of them — LenDen Club and IndiaP2P. Both are seeing a spike in volumes already. What the RBI circular really did was weed out smaller players that couldn’t comply. And that’s actually created a healthier ecosystem — stronger platforms, lower acquisition costs, and more confidence for investors who want to explore P2P as an income stream. This is how regulation quietly reshaped an entire industry, and why the P2P opportunity today looks very different from a year ago. Vanya and I unpacked it all in our deep dive. Winners, risks, and what this reset means for your money: https://lnkd.in/dSYGQDXw

The Reserve Bank of India (RBI) has recently tightened the regulatory framework for Non-Banking Financial Company-Peer to Peer (#NBFC-P2P) lending platforms, signaling a significant shift aimed at enhancing transparency and ensuring strict compliance within the industry. The revised guidelines, which come into effect immediately, are a response to observed violations of existing regulations and aim to protect the integrity of the rapidly growing P2P lending sector in India. Peer-to-Peer (P2P) lending has emerged as a popular alternative to traditional banking, offering borrowers and lenders an online platform to engage directly in financial transactions. The sector has grown substantially since the RBI first introduced guidelines in 2017, with the current market size estimated to be around ₹7,000-8,000 crore. However, despite this growth, P2P lending remains a relatively small player in the broader financial landscape, with traditional banks and NBFCs still dominating the lending market. The growth of P2P lending can be attributed to the sector’s ability to offer borrowers easier access to credit and lenders the potential for higher returns. However, this has also led to the adoption of practices that blur the lines between P2P platforms and traditional financial institutions, prompting the RBI to step in with more stringent regulations. In my opinion, RBI's revised guidelines for NBFC-P2P lending platforms represent a strategic move towards fostering responsible growth in the P2P lending sector. By focusing on transparency, compliance, and risk management, the RBI is setting the stage for a more robust and sustainable P2P lending ecosystem in India. The new guidelines will likely weed out non-compliant players, leaving behind a more resilient industry that can withstand regulatory scrutiny and market challenges. This, in turn, will attract more serious and informed lenders, thereby contributing to the sector's long-term stability and growth. Moreover, the emphasis on not assuming credit risk and avoiding misleading marketing practices will ensure that P2P platforms operate within the boundaries of their intended function—as intermediaries rather than direct lenders or deposit-takers. This will preserve the integrity of the sector and prevent it from evolving into a shadow banking system. RBI's tightened guidelines are a welcome development that will strengthen the foundation of the P2P lending industry in India. By ensuring transparency, compliance, and responsible practices, the RBI is paving the way for a more secure and efficient P2P lending environment, which will ultimately benefit the broader Indian payment ecosystem. Ram Rastogi 🇮🇳 Reserve Bank of India (RBI) Mukesh Bubna Fintech Association for Consumer Empowerment (FACE)

𝐈𝐬 𝐩𝐞𝐞𝐫-𝐭𝐨-𝐩𝐞𝐞𝐫 𝐥𝐞𝐧𝐝𝐢𝐧𝐠 𝐚 𝐭𝐫𝐚𝐩? Or a startup game-changer? Raising capital is tough. Banks say no or drown you in infinite paperwork. Investors take too long. VCs want a big slice of your company. But what if you could borrow money directly from individuals—no middlemen, no equity loss? 👉 That’s peer-to-peer (P2P) lending. A growing number of founders are skipping traditional financing and turning to platforms where everyday investors fund their businesses. How it works? ↳ You apply on a P2P platform, set your loan terms, and investors decide whether to fund you. It’s like crowdfunding, but for loans. Why founders love it? ✅ Faster access to capital – no months-long negotiations,  just a profile, a pitch, and a loan. ✅ Flexible interest rates – some founders secure single-digit rates, depending on creditworthiness. ✅ No equity dilution – unlike VC money, you keep full ownership of your company,  just repayments. ⚠️ The risks you should know: ❌ Credit checks still matter – a low credit score? Expect higher interest rates. ❌ Platform reputation is key – some are rock-solid. Others… not so much. ❌ Default risks are real – if you can’t repay, things can get ugly: legal actions, credit damage, and platform bans. With more startups seeking alternative financing, P2P lending is becoming a serious option. Have you tried it , or are you planning to? ---------------------------------------- 📢 Stay ahead in fundraising, entrepreneurship, and VC strategies! Follow Leon Eisen, PhD for actionable insights, tips, and expert guidance.