P2P lending is a relatively new kid on the block of alternative lending. Though the industry is still in a nascent stage, the p2p platforms have managed to cause their fair share of disruptions. Are these tech savvy trendsetters really a threat to the traditional lending tycoons such as NBFCs, and MFIs? Well, let’s find out!
What is P2P lending?
P2P lending is a type of new age finance offered by the people, for the people. The P2P platforms act as financial match makers between the Lenders and Borrowers by providing them an online marketplace to connect with each other and negotiate a fair deal without any financial intermediaries.
Why choose P2P?
Traditional banks don’t often take a human-centric approach. The tedious and time-consuming process of applying for a loan from bank tends to drain all energy out of the borrowers. Also, the meager interest rates offered for depositors leaves much to be desired. The millennials who are done waiting for the banks to understand them have started looking for alternative ways to lend and borrow.
The way in which P2P lending sites offer high returns for lenders while providing loans at competitive interest rate for borrowers has managed to keep the desperate consumers hooked to it.