India Peer-to-Peer (P2P) Lending Market By Type (Consumer Lending, Business Lending), By Borrower Type (Individual, Small Business, Real Estate, Others (Marriage etc.)), By Region, Competition, Forecast & Opportunities, 2029
Published Date: February - 2025 | Publisher: MIR | No of Pages: 320 | Industry: BFSI | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationIndia Peer-to-Peer (P2P) Lending Market By Type (Consumer Lending, Business Lending), By Borrower Type (Individual, Small Business, Real Estate, Others (Marriage etc.)), By Region, Competition, Forecast & Opportunities, 2029
| Forecast Period | 2025-2029 |
| Market Size (2023) | USD10.52 Billion |
| CAGR (2023-2028) | 19.85% |
| Fastest Growing Segment | Small Businesses |
| Largest Market | South India |
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India Peer-to-Peer (P2P) Lending Market is growing at a robust CAGR, thanks to the increasing trend of online payments and rising number of platforms, which support digital transactions in the country. Furthermore, the emergence of fintech companies, surge in government initiatives and high demand for credit is significantly contributing to this market’s growth.
India Peer-to-Peer Lending Market Scope
Peer-to-peer (P2P) lending is a form of lending that takes place directly between individuals or "peers" without the involvement of a traditional financial institution, such as a bank. In a P2P lending model, borrowers apply for loans through an online platform that connects them with potential lenders.
Peer-to-peer lending can be a good option for borrowers who face difficulties in obtaining loans from traditional sources or who want to avoid high interest rates and fees associated with credit cards or payday loans. It can also be a way for investors to diversify their portfolios and earn higher returns than they might gain from traditional investments, such as savings accounts. However, as with any investment, P2P lending carries risks and it is important to do proper homework before participating in this type of lending.
India Peer-to-Peer Lending Market Overview
In recent years, peer-to-peer lending has become increasingly The India peer-to-peer lending market is expected to grow at a faster rate in forecasted period. The market is significantly driven by the rise of digital payments, increasing internet usage, and fueling demand for credit among consumers and small businesses. P2P lending platforms in India are using AI and ML to assess credit risk and make lending decisions. This has helped to reduce the risk of default and improve the overall efficiency of the lending process.
The peer-to-peer lending market in India is a rapidly growing segment of the fintech industry. P2P lending platforms connect borrowers with investors (lenders) through an online marketplace, enabling borrowers to obtain loans at competitive interest rates and investors to earn higher returns on their investments. The high return rates in P2P lending are the main factor that is attracting Indian investors to take it up as a preferred investment choice. Compared to conventional investing choices, such as savings accounts and fixed deposits, it offers significantly higher returns. P2P lending platforms offer yields of 10–14%, depending on the risk involved with the borrower, as opposed to low returns of 3-4% offered by savings accounts and fixed deposits.
India Peer-to-Peer Lending Market Drivers
The peer-to-peer lending market in India has grown rapidly in recent years, driven by a combination of factors, such as increasing usage of smartphone and internet penetration, a large population of underserved borrowers, high demand for credit, and a supportive regulatory environment.
The flexibility offered by peer-to-peer lending is another factor contributing to its growing popularity among Indian investors. Investors can choose the amount they want to lend and the length of time they want to keep their investment on P2P lending platforms. This implies that investors can customize their investments to meet their unique demands and financial objectives.
P2P lending platforms also provide a range of investment possibilities, including secured and unsecured loans, loans to individuals and businesses, both, and for both, short- and long-term periods, as well. Investors can diversify their portfolio and spread their risk over a number of loans and borrowers, owing to this hyper-diversification. Borrowers can apply for loans online and receive funds quickly, while investors can browse and invest in loans through the platform. Thus, peer-to-peer lending platforms are easy to access and use, which makes them popular among borrowers and investors.
India Peer-to-Peer Lending Market Trends
The peer-to-peer lending market in India has been experiencing significant growth in the SME lending market. Many SMEs in India are unable to access credit from traditional banks, and P2P lending platforms provide an alternative source of funding for these businesses. Additionally, the RBI has established guidelines for maintaining confidentiality regarding any transactions made through the platform. P2P platforms use advanced technology to follow the confidentiality standards of the RBI, making them reliable platforms to borrow from or lend to, unlike certain other platforms where sensitive data is not secured properly.
Nowadays, a lot of P2P platforms incorporate artificial intelligence (AI) and machine learning, which has increased the security of transactions. For instance, artificial intelligence can enhance current credit risk models, reducing the default risk of loans granted by up to 70%. Thus, P2P business has evolved into a relatively secure platform for investors and borrowers wanting to achieve their financial objectives, thanks to IT regulations and RBI restrictions. This factor is also expected to propel the market during the forecast period.
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India Peer-to-Peer Lending Market Challenges
Though peer-to-peer (P2P) lending market in India has been growing rapidly, the market also faces several challenges. Many potential borrowers and investors are still unaware of P2P lending as an alternative source of credit and investment. This lack of awareness can make it challenging for P2P lending platforms to attract borrowers and investors. Also, these platforms are at a higher risk of default when borrowers fail to repay their loans. While many platforms have measures put in place to reduce the risk of default, such as credit checks and risk assessments, there is always a risk. The government does not offer insurance or any other kind of protection to lenders if a borrower defaults. Also, P2P lending platforms in India have limited access to funding than traditional banks. This can make it challenging for platforms to scale up and meet the growing demand for credit.
Market Recent Developments
- In 2022, Dreamplug Technologies Pvt. Limited, the owner of the fintech unicorn, Cred, acquired a minority stake in Mumbai-based lending company, LiquiLoans, with an investment of up to USD 10 million.
- As part of BharatPe's peer-to-peer business, individual investors will be able to invest and borrow money through the "12% Club" app launching in 2021.In 2020, Faircent announced the launch of a new loan program to assist small businesses and individuals in India that have had minimal or no financial impact from the COVID-19 pandemic.
- In 2020, 5paisa launched a peer-to-peer lending platform, where one can earn interest as high as 36 per cent per annum and can lend up to USD 61,136 to multiple borrowers.
Market Opportunities
The peer-to-peer (P2P) lending market in India presents several opportunities for growth and innovation to its stakeholders. P2P lending platforms in India can help address the credit gap by providing access to credit for SMEs and individuals without credit history. Indian investors are looking for diversification in their investment portfolios. P2P lending offers the chance to diversify investments through providing loans to borrowers with various credit histories and risk profiles. P2P lending platforms in India can collaborate with traditional financial institutions, such as banks and NBFCs, to expand their reach and offer more loan products to borrowers in the coming years.
P2P lending platforms in India can integrate with digital banking platforms to provide a seamless and convenient lending experience for borrowers. This can also help to increase the reach of P2P lending platforms and attract more borrowers. P2P lending platforms in India can expand into rural markets, where there is a large unmet demand for credit. This can help to promote financial inclusion and provide access to credit for those who need it the most. Thus, P2P lending market in India presents several opportunities for growth and innovation, and platforms that can capitalize on these opportunities are likely to succeed in the forecasted period.
Market Segmentation
The India peer-to-peer lending market is analyzed on three frontsType, borrower type, and region. Based on type, the market is segmented into consumer lending and business lending. Based on borrower type, the market is segmented into individual, small business, real estate, and others (marriage etc.). Based on region, the market is divided into North, South, East, and West.
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Company Profiles
Transactree Technologies Private Limited (Lendbox), Fairassets Technologies Private Limited (Faircent), RNVP Technology Private Limited (i2ifunding), Bridge Fintech Solutions Private Limited (Finzy), Innofin Solutions Private Limited, Lendingkart Technologies Private Limited, Fintelligence Data Science Private Limited (RupeeCircle), Fair Vinimay Services Private Limited, Etyacol Technologies Pvt. Ltd (Cashkumar), and NDX P2P Private Limited (LiquiLoans) are some of the major players in the India peer-to-peer lending market.
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Attribute |
Details |
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Base Year |
2023 |
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Historic Data |
2019 – 2022 |
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Estimated Year |
2024 |
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Forecast Period |
2028 – 2029 |
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Quantitative Units |
Value in USD Million, CAGR for 2019-2023 and 2024-2029 |
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Report Coverage |
Revenue forecast, company share, competitive landscape, growth factors, and trends |
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Segments Covered |
Type Borrower Type Region |
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Regional scope |
North, South, East, West |
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Key Companies Profiled |
Transactree Technologies Private Limited (Lendbox), Fairassets Technologies Private Limited (Faircent), RNVP Technology Private Limited (i2ifunding), Bridge Fintech Solutions Private Limited (Finzy), Innofin Solutions Private Limited, Lendingkart Technologies Private Limited, Fintelligence Data Science Private Limited (RupeeCircle), Fair Vinimay Services Private Limited, Etyacol Technologies Pvt. Ltd (Cashkumar), and NDX P2P Private Limited (LiquiLoans) |
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Customization scope |
10% free report customization with purchase. Addition or alteration to country, regional & segment scope. |
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Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
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Delivery Format |
PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request) |
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