Economic Times (ET). When did you start IndiaP2P and what was the idea behind it?
Neha Juneja (NJ): We started operations in 2022 with a core thesis that women and small business owners make for prudent borrowers. Investing in them is both profitable and purposeful, given the direct and second-order effects of enabling income expansion, especially for women.
Building on this thesis, we now source loans predominantly from women businesses nationwide and curate them for retail lenders to lend to.
ET: The P2P sector in India has been around for some time with some established players. How do you plan to make an impact?
NJ: Our differentiation is our target borrower base and underwriting therein. We have tailored processes and algorithms to source and assess small loans (up to Rs 100,000). Our sourcing practices make it easier for women to borrow in comparison with traditional lenders.
ET: Given the changing economic conditions, what role does P2P have to play in supporting growth?
NJ: Adequate credit is a critical component of economic growth. While we have seen strong overall growth over the past years, our credit gap is still very wide in the small business/nano/MSME segments, which are not only large employment generators but also critical levers for growth.P2P lending unlocks capital from a new source, which is retail investors, who sit outside our formal credit ecosystem at the moment. Furthermore, they enable certain efficiencies in the credit value chain, thereby reducing costs. This new, efficiently deployed capital source has great potential for closing this credit gap and financial inclusion.ET: P2P had the promise of low interest rates for borrowers and, at the same time, attractive return rates for lenders. How has this panned out?
NJ: P2P lending has been successful in enabling attractive returns for investors. While entailing risk, this investment type does come with the comfort of being regulated by the RBI. On the borrower side, our understanding is that interest pricing is competitive, but not significantly lower than the market norm.
ET: RBI has introduced the regulatory framework for the sector in 2017. What role is that playing in supporting the sector and are there any grey areas?
NJ: This is a regulated sector and the regulator’s role and guidance are of supreme importance. The RBI has been widely appreciated and regarded for its development of peer-to-peer lending guidelines, which have led to the development of this nascent industry.
The financial services sector overall is evolving very fast and P2P lending, given its new and digital nature, is also seeing momentum. The regulator is mindful of these developments and evolves its guidelines and directives accordingly.
ET: The RBI has also of late been very cognizant about functioning of the fintech sector. What is your view on some of the measures and actions taken by the central bank?
NJ: We have seen rapid expansion in digital financial services over the past few years. There has been a proliferation of digital loans, digital assets, investments and whatnot. Any regulator would keep a keen eye on fast expanding new formats and from this point of view, as operators, we expect regulations also to evolve and change.
ET: What is the rate of innovation in the P2P sector and what can we expect next?
NJ: We can expect more innovation in the P2P sector, which makes it easier for lenders to invest for the long-term and make regular returns.
Most alternative investments today are seen as relatively short-term options. With P2P lending becoming longer term, it would become a mainstream choice for India’s savers and investors.
ET: How has business been since you started and how has this fiscal been for you?
NJ: As the founding team, all of us come with prior entrepreneurial experience. We can safely say that this business has found product market fit and quick traction very early. We are now backed by over 1 lakh users and some of the best VCs in the market.
ET: What are your plans for IndiaP2P and how do you plan to make a greater impact?
NJ: We are scaling our operations and adding new credit and investment products. Overall, our impact increases with our scale. We are committed to scaling with our target borrower segment and building products that deliver real economic and social value addition.
