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Business EconomyPosted at: Feb 26 2020 11:59AM


'Emergencies' major reason for borrowing on P2P platform: Study

New Delhi, Feb 26 (UNI) Emergencies such as medical, rent, advance salary were lead reasons for borrowing on P2P platform, says a study.
LenDenClub, a peer-to-peer lending platforms in India, on Tuesday released its 2019 report on the key borrowing and lending behavior of consumers (borrowers and lenders).
According to the report, the financial city of Mumbai and the Silicon city Bangalore topped the chart for the maximum number of lenders and borrowers respectively on P2P platforms.
New age technology Unified Payments Interface (UPI) with 50 per cent users has topped the chart for loan repayment followed by 47 per cent of ECS payment in P2P lending.
Education and needs like family functions, home renovations were the other key reasons to borrow after emergencies. The LenDenClub data clearly outlines the purpose of borrowing and lending among current society being need-oriented rather than extravagance.
When it comes to borrowing and spending, Bangalore is ahead in terms of people having the highest credit demand, Mumbai ranked second, followed by other metros such as Hyderabad, Pune and Chennai.
The highest numbers of lenders were from the financial capital of Mumbai, followed by the tech cities Bangalore and Hyderabad.
The findings depict that young, tech-savvy, population with financial aptitude are much ahead of its previous generations, as 40 per cent lenders and 53 per cent of borrowers are under the age bracket of less than 30 yrs.
Younger generation, it says, is more financially responsible and are comfortable borrowing and lending on new-age digital platforms.
The data also revealed that 12 per cent of the borrowers and 16 per cent of the lenders comprised of women customers, which suggests that salaried women’s loan borrowing market is under-penetrated compared to men.
Customers from business backgrounds topped the chart along with CXOs to mid-managerial level and salaried individuals as investors on the platform.
Almost 63 per cent of the borrowers availed credit for emergencies, while 37 per cent availed for aspirational needs. This is turn suggested that emergencies was one of the main reasons for taking loans followed by aspirations such as family functions and home renovations.
The customer analysis also has certain fascinating insights. Tuesdays, Wednesdays and Thursdays were the preferred days by borrowers for credit application. While the afternoon meal break i.e. 1200 hrs to 1300 hrs was the most preferred time when majority of the borrowers applied for a loan. The average percentage of repeat borrowers is 37 per cent in which the loan frequency of repeat borrowers is three times.
On the occasion, Founder & CEO of LenDenClub Bhavin Patel said, ''There is no hiding of the fact that the usage of UPI in India is growing at a pace and has attracted attention of the entire world. The same can be seen in our data where younger technology-savvy generations are using newer technologies such as UPI for doing transactions.''
''Considering only 16 per cent of the lenders on our platform are women, we will work towards creating awareness and reducing the gender gap. Also the data clearly reveals that the majority of loans are availed for emergency situations. This is the first of its kind data and will help investors to take informed decisions on borrowers through our platform,'' said Mr Patel.
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