Major peer-to-peer (P2P) lending exchanges are exploring new businesses after seeing a sharp fall in lending volumes and industry AUMs shrinking 65 per cent post the Reserve Bank of India’s (RBI) August 2024 diktat, sources told businessline.
“For us it is a wait and watch scenario. We are looking at other avenues on what we can do. Right now there is no firm plan on what needs to be done. It has been 2 quarters after revised guidelines, so the first reaction was to stabilise the book, understand the revised guidelines and see what is possible,” an official at a large exchange said.
“As on August 16, the overall standard AUM of the P2P industry was around ₹10,000 crore. It has now reduced close to ₹3,500 crore. Around 65 per cent industry has shrunk in matter of seven months. Disbursements, which used to be around ₹1,500 crore per month, has reduced to ₹50 crore-₹100 crore. Over next 1.5 years, the AUM could moderate to around ₹500 crore-₹1,00 crore,” they added.
The regulator had in August barred P2P players from offering tenure-linked assured minimum returns and liquidity options, apart from mandating T+1 settlement cycle.
Gloomy outlook
According to sources, P2P major LiquiLoans has stopped onboarding new customers on its platform post August 16, while another large exchange Faircent is onboarding new customers at a very slow pace due to strict compliance standards. Meanwhile, the founders of Lendbox are seen promoting Per Annum-Estates, which enables fractional ownership of real estate assets.
Another small P2P exchange Monexo’s internet website is not accessible.
“Transaction volumes are at about 50 per cent levels, however actual disbursements (lender funds matched to borrower requirement) are lower due to leakages caused by T+1. The August 16 guidelines put some new limitations on P2P platforms such as fixed pricing, T+1 timeline etc. These require large back-end changes which we have done,” said a small P2P exchange official.
However, Bhavin Patel, Founder, LenDenClub remains optimistic, said the P2P industry will see newer players with fresh perspectives and mindsets entering the space in the coming days.
“Since the regulatory changes in August 2024, the transaction volume on our platform has grown nearly fourfold in terms of the number of lenders participating in loan funding. In terms of transaction value, we have recovered to approximately 80-85 per cent of our pre-regulation business levels. This strong rebound reflects the resilience of our platform and the continued trust of our users in our services,” he said.
