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The Morning Brief
Is the P2P lending industry dying?
Sep 5, 2024
In this insightful discussion, fintech expert Pratik Bhakta from Economic Times explores the rocky terrain of India's P2P lending industry. He outlines the recent RBI mandate and its potential to reshape the landscape, discussing the operational challenges and risks like liquidity and defaults. Pratik emphasizes the need for startups to adapt to the new regulatory environment while retaining consumer trust. The conversation uncovers critical hurdles that lenders face and the industry’s future amidst growing costs and compliance issues.
18:49
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Quick takeaways
- The RBI's new regulations pose significant challenges for the P2P lending industry, potentially threatening its operational viability and growth.
- Concerns about funding availability and market shrinkage indicate a shift in borrower preferences towards traditional banks and non-banking financial companies.
Deep dives
Decline of the P2P Lending Industry in India
The peer-to-peer (P2P) lending industry in India is facing significant challenges, largely due to increased scrutiny from the Reserve Bank of India (RBI). This platform facilitated direct connections between borrowers and lenders, operating outside traditional financial institutions. However, the sector has struggled with regulatory compliance, with many recognized players remaining inactive and a limited asset base. As a result, the RBI's stricter guidelines aim to protect consumers while addressing systemic risks, significantly impacting how P2P startups conduct their operations.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode