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P2P Platforms: Millennials are the ones to come on board to lend or borrow

An analysis done by LenDenClub from the annual data of four lakh users of its platform

March 16, 2020 / 10:18 AM IST

The young are restless and desire money, and they want it instantaneously. The emergence of peer-to-peer (P2P) lending platforms has led to a culture that allows millennials – who may otherwise not be able to get loans from banks – to borrow easily, with little credit evaluation. Another individual sits on the other end of the platform, ready to lend money and exploit the helpless borrower, with hopes of earning higher interest rates; all in the name of ‘investment.’

LenDenClub, a P2P platform, has analysed the annual data of four lakh users on its platform and has come up with a report titled “The 2019 Lending and Borrowing Behaviour.” There are close to 20 P2P platforms in India. LenDenClub has looked at borrowers’ age group, typical borrowing patterns, lenders’ background, age-group and investment habits of people on P2P platforms across India to get a better picture of who exactly comes on board. Let’s delve on the key points from the study.

Millennials borrow heavily for emergencies

The findings depict that 80 per cent of the borrowers are under the age of 35 years. Also, on P2P platforms, 71 per cent of the borrowers have monthly incomes of less than Rs 30,000. Harshvardhan Roongta, Principal Financial Planner at Roongta Securities points out, “Most people who borrow on P2P platforms are those who don’t get loans from banks because of a weak credit profile or very low income.”