Peer to Peer Lending in India
What is Peer to Peer lending?
Peer to Peer Lending or P2P Lending is a new technology enabled mechanism that formalizes the entire process of private finance and non-institutional lending between individuals. It is a platform for exchange between people who have money and people who need money in the form of a loan. People with excess funds can now extend a loan to borrowers anywhere across the country and earn returns on their funds in the form of monthly EMIs along with interest.
This concept helps borrowers in need of money connect with lenders from across India to crowdfund their loans. The returns are attractive enough for lenders to invest small amounts of money across multiple borrowers. Borrower details are thoroughly checked by the P2P lending platform and a credit assessment is performed and the profile presented to the lenders. P2P lending through online platforms started off as an idea in the US a decade back and is now gaining popularity in India.
Peer to Peer Lending aims to formalize this route by turning it into a valid investment option for any person with spare funds. It gives borrowers a way to fund their requirement for personal loans or business loans by opening a large P2P Lender group not confined just to their friends or peer group. Online peer to peer lending is a great alternative, if you have spare funds, to earn more than traditional investment options like Fixed Deposits, Mutual Funds etc with a little more risk.
P2P lending in India can occur in various forms including long term loan and short-term loan. Any person with validated credentials can become a loan giver or loan taker. These form of loans are unsecured in nature and can be taken or given as a personal loan or a business loan. The P2P Lenders can be an individual and private finance provider who can fill details and become registered P2P Lenders on the platform. All loans attract a pre-agreed rate of interest between the borrower and P2P Lender. Cashkumar does not recommend or try to influence any decision of the borrower or P2P Lender neither will it handle any fund transfer as per the rules of the RBI.
What does Cashkumar offer?
Cashkumar offers an exciting new asset class for investors across India through Peer to Peer lending. Having acquired an NBFC-P2P license from the Reserve Bank of India (RBI) to bring together borrowers and lenders on a digital platform for short-term personal loans. The model allows a lot of people who have been financially excluded to participate in the credit system. People with money get access to a new asset class and can invest by lending small amounts to multiple borrowers. Cashkumar undertakes the credit analysis of the applicants and approves borrowers based on multiple traditional & alternate data points. As compared to banks, P2P lending allows people from all segments to apply and avail a loan with a quick and completely online process.
RBI had released regulations in the form of Master Directions for Peer to Peer Lending (P2P Lending) Platforms in India on 4th October 2017. Cashkumar has received a valid Certificate of Registration dated 10th July, 2018 issued by the Reserve Bank of India under Section 45 IA of the Reserve Bank of India Act, 1934. With this, we have become the first company in Bangalore to have secured an NBFC-P2P license from RBI.
Attractive Returns
Peer to Peer loans provide high returns if ample investments are made in a portfolio of loans over a decent time period, even accounting for the risk.
Easy to Use
Lending can be done online with a user-friendly website and App by checking borrower profiles real-time and pledging suitable amounts.
Portfolio Diversification
Small amounts can be invested over different categories of loan and borrower profiles to create a healthy balance between risk and returns.
Scientific Assessment
A proprietary algorithm developed in-house conducts a comprehensive check of borrower profiles using credit reports, bank statements and alternate data to underwrite loans.
