Mumbai: Bad loans in the peer-to-peer (P2P) lending industry will more than double in FY2024 (FY24) to Rs. 1,163 crore which was an increase of 146 percent in FY23.
According to an RTI (Right to Information) response to CapitalMind Financial Services by the Reserve Bank of India (RBI), on bad loans
By the end of the financial year ending March 2024, P2P lending was Rs. 1,163 crore touched. This is a seven-fold jump from the 2018-19 financial year when bad loans stood at Rs 14.7 crore, when P2P lending was at its peak. According to CapitalMind Financial Services, the nascent stage. It is estimated that more than 17 percent of the total loans in this sector are NPAs.
Earlier this year, the RBI had flagged regulatory violations by some NBFC P2P lending platforms. It then tightened norms for NBFC P2P
Lending platforms to improve compliance. While these measures aim to stabilize the sector, CapitalMind says they also present “disruptions”.
which can “stifle growth and innovation.”
P2P lending was introduced as an alternative to traditional banking, offering attractive returns to lenders and competitive interest rates to borrowers. However, loans were given at high interest rates, especially to rural borrowers.