Peer-to-peer firms need entry into secured lending, says Rajat Gandhi

The Reserve Bank of India's FSR of December 2021 had also highlighted that given the level of inflation, investors are looking for a certain level of returns, and P2P platforms offer an incentive

Peer-to-peer (P2P) lending -- basically crowd-funding -- has seen exponential growth in recent years with aggregate exposure now close to Rs 5,000 crore -- more than double the projection made in the Financial Stability Report (FSR) of December 2021. This was mainly because lenders on these platforms are searching for higher yields. Rajat Gandhi, founder and chief executive officer of Faircent.com, the country’s largest P2P firm, spoke with Raghu Mohan.
Edited excerpts:

What explains the exponential growth in P2P lending, even as legacy lenders are growing their footprint?
 

There’s a huge underserved and unserved market. That’s why P2P firms came into