Interest rates on bank deposits are at a decade low, and those on small savings schemes are close to a 40-year low. This has forced people to look for alternatives, one of which is peer-to-peer, or P2P, lending. Globally, P2P lending has been around for a decade, starting around the 2008 financial crisis. However, in India, it started four-five years ago, but without guidelines or recognition from regulators, which limited its popularity. However, last year, the Reserve Bank of India, or RBI, came out with regulations on P2P lending. Since then, it seems to have picked up pace.
First, let us understand what is P2P lending. As the name suggests, it is lending of money by one person to another with the helo of a collaborator, which is a fintech…
