P2P lending limit raised to Rs 50 lakh

Kolkata: The P2P lending sector is expected to get a boost with the RBI deciding to increase the borrowing and lending limits for the users of the peer-to-peer (P2P) platform. The move aims at not only helping investors to diversify risk but also borrowers to get larger sums of loans.

At present, the aggregate limits for both borrowers and lenders across all P2P platforms stand at Rs 10 lakh, whereas exposure of a single lender to a single borrower is capped at Rs 50,000 across all NBFC-P2P platforms. In order to give the next push to the lending platforms, the aggregate exposure of a lender to all borrowers at any point of time, across all P2P platforms, shall be subject to a cap of Rs 50 lakh, the RBI said.

Besides, the RBI would do away with the requirement of escrow accounts to be operated by a bank promoted trustee for fund transfer.

The move is expected to bring cheers to those looking to borrow or invest on the P2P platform.

“When you have the robust technology and technological platform, it always makes sense to use them in order to create an opportunity for lenders to create far more stable and diversified portfolios. I think, the increased limit will ease credit supply, benefitting MSMEs. If the economy is to prosper, priority must be given on providing easy credit to small businesses and the self- employed. There has to be a steady flow of alternative credit into the economy through NBFC-P2P platforms. Overall it’s a good move,” said Hemant Kanoria, Chairman, Srei Infrastructure Finance Ltd.