InvestorQ : How is peer-to-peer lending helping Indian borrowers?
Kalyani Sundaram made post

How is peer-to-peer lending helping Indian borrowers?

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Pratik vyas answered.
3 years ago
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Unlike banks and non-banking finance companies (NBFCs), peer-to-peer (P2P) lending doesn't yet have access to credit bureaus. Thus, they rely on big data analytics for credit risk assessment instead of just credit score.

The way this is helping Indian borrowers is because banks have stringent criteria and do not lend to anyone who doesn’t meet the said criteria. So, at a time when banks reject loan applications only because applicants don’t meet their eligibility criteria, peer-to-peer lending platforms, in contrast, give chances to creditworthy borrowers who might have been ineligible for a loan from banks and other traditional institutes.

P2P loans are also a bit cheaper compared to others, as they have no middleman and are highly technologically driven. By automating and cutting the cost of work load, P2P lending platforms have made borrowing relatively cheaper and faster.

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