Published Paper Details:

Abstract In Modern times, financial operations of the NBFCs are far superior in terms of hassle free approach to customer, approvals of loans and accelerated disbursement of the sanctioned loans because of the Integration of Innovative financial services with the Technological solutions. One of such arrangement is peer to peer lending (P2P), an online lending platform. It can be defined as "the use of an online platform that brings lenders and borrowers together in order to provide unsecured loans. People who want to borrow money (borrowers) connect with people who have money to lend (lenders)". The main characteristic of peer-to-peer lending is that both the parties do not have any relationship existing between them and still can have a safe and successful transaction. It is a win-win situation for both, as borrowers can get credit with fewer hassles and lower interest rates, while lenders can gain higher returns on their invested capital. RBI has issued guidelines to regulate peer lending companies as non-banking financial companies (NBFCS) under section 451 (f)(iii) the RBI Act. At present, there are 26 P2P lending platforms registered with RBI. The paper is prepared to scrutiny the overview of P2P Lending, policy guidelines of RBI and performance of one of the leading P2P companies viz LenDen club. Analysis reveals that it is an upcoming sector in the Indian financial sector landscape exhibiting a growth of more than 10 times in one year since its evolution in 2012. In 2023 year, peer-to-peer lending has seen a large number of new entrants into the market. Till date, 3-3.5 million investors have opened investment accounts across various P2P lending platforms in India. Further, these Platforms have invested approximately Rs 20,000 crore in loans. This sector is playing pivotal role in bridging the gap between Traditional banking system and unmet financial needs of individuals and SME business. This alternative lending model not only enhances access to credit but also fosters financial inclusion and empowers a broader spectrum of individuals to participate actively in India's growing economy. In recent times, most of the small investors finding this sector more profitable than the equity market with less risk. Hence, RBI has to sharpen its regulating teeth to protect the small investors. Performance analysis of LenDen club reveals that more than 1 crore customers have registered with Rs. 13693 crores invested since its inception. It has been a largest P2P with an annual growth of 400%. In the forthcoming years, the platform of P2P lending will be great source of finance individuals and SME businesses.