NBFC’s Peer to Peer Lending Platform

India has always been inclined towards cash transactions. However, with the increase in usage of mobile phones and the accessibility of the Internet in India, the Digital Payments System witnessed exponential growth in India. Therefore, the Reserve Bank of India (RBI), considering the shift towards convenience and the change in mind-set of the people, introduced NBFC Peer-to-Peer Lending Direction, 2017 to promote and facilitate the use of P2P Platform in India. Essentially, P2P lending is a platform-based lending mechanism that connects lenders directly with market-based creditors. This puts together various classes of creditors and lenders on a common forum and then analyses the desires and requirements of all parties to facilitate a deal that is ideally tailored to both. Now, in order to avail a loan through P2P Lending Platform, the person is required to register himself on the websites, which will connect him directly with different lenders. Thereafter, the website of the P2P Lending Platform will provide different prices, interest rates and conditions, depending upon the applicant's creditworthiness to make the purchase possible. Now, due to the recent boom in the use of the Digital Platform, P2P Platform has seen exponential growth, since P2P Lending Platform was earlier seen as providing financial connections to individuals that will be pushed on by traditional banks as a way to reduce student loan debt at a more attractive interest rate. However, in recent years, P2P Lending Platforms have expanded their coverage, and have now started providing Consumers with credit balance at lower interest rate, Home renovation loans and car leasing loans, in addition to providing loans to meet working capital requirement of their Consumers through their platforms.