P2P lending

Peer-to-Peer (P2P) lending is a fintech-enabled lending model that directly connects individual borrowers seeking personal loans with individual lenders willing to provide funds — through an online platform that facilitates matching, credit assessment, documentation, disbursement, and repayment collection, without the involvement of a traditional bank as an intermediary. In India, P2P lending platforms are regulated by the RBI under the Non-Banking Financial Company — Peer to Peer Lending Platform (NBFC-P2P) Directions, 2017. Registered Indian P2P platforms include Faircent, Lendbox, i2iFunding, and LenDen Club. Borrowers who may not qualify for formal bank credit — due to thin credit files, lower credit scores, or non-standard income documentation — access P2P loans at interest rates reflecting their credit risk, while lenders (investors) earn interest rates significantly higher than bank FD rates (typically 10% to 18% per annum) by accepting higher credit risk. The RBI has capped the aggregate exposure of a single lender across all P2P platforms at ₹50 lakh and limited borrowing per borrower to ₹50 lakh. For Ventura's investor audience, P2P lending represents an alternative fixed-income investment avenue — but with significant credit risk (including risk of default with no DICGC insurance cover), illiquidity (funds are locked for the loan duration), and platform risk — making it appropriate only as a small, satellite allocation for sophisticated investors with adequate understanding of credit evaluation.