In a landmark development for the country’s fintech ecosystem, India’s leading peer-to-peer lending companies have come together to form the Association of P2P Lending Platforms. The first-of-its-kind association will act as a representative for its members, as well as the country’s P2P lending industry. In addition, the association will work in conjunction with the government and regulatory authorities in matters of compliance, and to further the cause of financial inclusion in the country.

The association will actively work towards creating awareness about online P2P lending in India and promoting its merits as an innovative and high-yield asset class among individual and institutional investors. In line with this aim, the association will enter into strategic partnerships and collaborations with other stakeholders or industry players, organise seminar and events. The association will also invite honorary members from various domains to strengthen its authority in the Indian financial ecosystem.

The association also intends to undertake research and development, collect data and conduct surveys that will further the development of the P2P lending industry in India. The research and its findings will be shared publicly, and exchange of ideas will be encouraged through various conferences, lectures, and sponsored events.

Rising investor demand has fuelled the growth of P2P lending as a lucrative alternative to traditional investment instruments such as mutual funds, stocks, bonds, bank deposits, etc. Moreover, online P2P lending has promoted alternative forms of finance for those segments of the population which are unserved or underserved by the formal banking and finance sector. Through robust financial technologies and entirely tech-driven processes, P2P lending platforms reduce their operational costs significantly, as compared to traditional lending channels, thus enabling them to provide affordable Online Loan to consumers at lower lending rates.

Mr. Shankar Vaddadi, Founder, i-lend.in and President, Association of P2P Lending Platforms, commented, “Online P2P lending is leading the way for the evolution of alternative finance in the country, and is facilitating financial on a massive scale. Given the government and the RBI’s decision to include peer-to-peer lending as part of the national financial regulatory framework, the industry’s prospects in the next year are extremely promising. The Association of P2P Lending Platforms and all its members will be dedicated to ensuring the utmost co-operation with the regulators, facilitating the industry’s expansion on various fronts, and establishing P2P lending as an innovative and lucrative asset class among Indian consumers.”

Speaking on the alliance, Mr. Vinay Mathews, Founder and COO, Faircent.com also the Vice President of the association, said, “With the RBI’s guidelines and the creation of a regulatory framework, online peer-to-peer lending is set to headline fintech’s growth story in 2018, emerging as a disruptive force in investments and consumer lending. However, for the industry to make the most out of the emerging opportunities, P2P lending players will need to work together, not only with each other, but also with the government and regulators to ensure overall growth for the sector. The Association of P2P Lending Platforms will help streamline the industry and work with various stakeholders in the alternate lending and financial services ecosystem to further reinforce the sector’s potential in the market.”

Other founding members include Mr. Bhavin Patel, Founder and CEO, LenDenClub and Mr. Bhuvan Rustagi, Co-Founder and COO, Lendbox.in who will be the association’s Secretary and Treasurer respectively.

The growth projections for the P2P lending market, projected to be worth $4-5 billion by 2023, and the RBI’s guidelines have lent immense credibility to the P2P lending model. India’s online P2P lending industry has disrupted the consumer lending and asset class categories, with various factors such as the proliferation of digital transactions, the development of financial technologies, and the lack of access to affordable credit contributing to its rise. The sector’s inclusion into a larger regulatory ambit will help steer massive growth and expansion for players, helping them gain greater traction in the mainstream financial market, and strengthening confidence among borrowers and investors.