‘Emergencies’ major reason for borrowing on P2P platform: study

by Suman Gupta

UPI tops as preferred repayment mode on P2P lending platform

• Pune, Mumbai and Hyderabad ranked top in loan repayment

• Mumbai, Bangalore, Hyderabad are leading in lending on P2P platform

• 16% and 12% of women are lending and borrowing respectively

• LenDenClub releases its 2019 borrowing and lending analysis – ‘The P2P Lending and Borrowing behavior’

Mumbai, February, 2020: Emergencies such as medical, rent, advance salary were lead reasons for borrowing on P2P platform says study. LenDenClub, one of the leading peer-to-peer lending platforms in India, today released its 2019 report on the key borrowing and lending behavior of consumers (borrowers and lenders). According to the report, the financial city of Mumbai and the Silicon city Bangalore topped the chart for the maximum number of lenders and borrowers respectively on P2P platforms.

New age technology Unified Payments Interface (UPI) with 50% users has topped the chart for loan repayment followed by 47% of ECS payment in P2P lending.

Education and needs like family functions, home renovations were the other key reasons to borrow after emergencies. The LenDenClub data clearly outlines the purpose of borrowing and lending among current society being need-oriented rather than extravagance.

LenDenClub, the P2P platform that offers loans up to Rs. 10,000 has analyzed the annual data of more than 4,00,000 users, and has come up with a report – ‘The 2019 Lending and Borrowing Behavior’. It gives out multiple data points and key insights showing the typical consumption patterns, borrowing and investment habits of people on P2P platform across India.

When it comes to borrowing and spending, Bangalore is ahead in terms of people having the highest credit demand, Mumbai ranked second, followed by other metros such as Hyderabad, Pune and Chennai. The highest numbers of lenders were from the financial capital of Mumbai, followed by the tech cities Bangalore and Hyderabad.

The findings depict that young, tech-savvy, population with financial aptitude are much ahead of its previous generations, as 40% lenders and 53% of borrowers are under the age bracket of less than 30 yrs. The findings also reveal that the younger generation is more financially responsible and are comfortable borrowing and lending on new-age digital platforms.

The data also revealed that 12% of the borrowers and 16% of the lenders comprised of women customers, which suggests that salaried women’s loan borrowing market is under-penetrated compared to men. Customers from business backgrounds topped the chart along with CXOs to mid-managerial level and salaried individuals as investors on the platform.

63% of the borrowers availed credit for emergencies, while 37% availed for aspirational needs. This is turn suggested that emergencies was one of the main reasons for taking loans followed by aspirations such as family functions and home renovations

The customer analysis also has certain fascinating insights. Tuesdays, Wednesdays and Thursdays were the preferred days by borrowers for credit application. While the afternoon meal break i.e. 12.00 noon to 1.00 pm was the most preferred time when majority of the borrowers applied for a loan. The average percentage of repeat borrowers is 37% in which the loan frequency of repeat borrowers is three times.

On the occasion, Founder & CEO of LenDenClub, Mr. Bhavin Patel said, “There is no hiding of the fact that the usage of UPI in India is growing at a pace and has attracted attention of the entire world. The same can be seen in our data where younger technology-savvy generations are using newer technologies such as UPI for doing transactions.”

“Considering only 16% of the lenders on our platform are women, we will work towards creating awareness and reducing the gender gap. Also the data clearly reveals that the majority of loans are availed for emergency situations. This is the first of its kind data and will help investors to take informed decisions on borrowers through our platform.” said Patel.

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About LenDenClub: LenDenClub is the fastest-growing peer-to-peer platform in India. It aims to foster financial inclusion by leveraging technology to support borrowers with hassle-free loans, even in the remotest parts of the country, while providing a new-age investment option for investors. Listing only pre-verified loans, LenDenClub offers investors a convenient medium to browse thousands of loans to earn better than fixed deposits, mutual funds etc. With 100% funding record for its borrowers, LenDenClub currently enjoys a user base of over half a million and disburses on an average 90,000 loans annually. While the platform hosts investors across India ranging from small-time entrepreneurs to NRIs, the borrowers are currently active in 7 states of the country. https://www.lendenclub.com/

An application offered by LenDenClub, InstaMoney is the go-to platform for borrowers to avail instant personal loans. The platform offers you quick loans at an interest rate ranging between 0% (minimum for no cost EMI finance) to 4% (maximum) per month for a tenure of 1-3 months. The loan amount offered under the category ranges between Rs. 5000 & Rs. 10000 and is applicable for people without any default/write-off in past. An extremely user-friendly process, the application only requires basic KYC details, and the applicant’s salary bank statement. Since InstaMoney does not require any credit history, it is a more accessible route for instant personal loans than banks. https://www.lendenclub.com/instamoney/