Faircent.com, India’s largest NBFC-P2P, has released its latest Research & Analysis Report 2018, which reveals some of the key trends witnessed by the P2P lending platform during the current year. Among the most significant developments for the NBFC-P2P sector was that 64% of all loans disbursed through the online platform were to small and medium-sized businesses. This included both new and old enterprises that availed loans through the platform for the purpose of funding expansion plans or to meet working capital requirements for day-to-day operations. The report also states that 31% of business funding through the platform was to SMEs from Tier-3 cities and 44% to those in Tier-2 cities.

Despite their huge contribution to the overall economy, most SMEs are unable to access funds from banks and financial institution due to inadequate financial records, lack of credit histories, especially in tier 2 and 3 cities, making it tough for them to get loans from banks and FIs. According to a report by ICRA, the amount of credit provided to the MSME sector stood at INR 16 trillion for FY 2017. This is still much lower than actual unmet demand for credit from the sector, i.e. INR 25 trillion.

Despite the current liquidity crisis faced by NBFCs in extending credit to MSMEs, funding to small businesses through Faircent.com has doubled over the last year. Further, small businesses operating in the Indian hinterland have benefitted the most. Presently, 31% of business funding through the platform is to SMEs from Tier-3 cities and 44% to those in Tier-2 cities, according to the Research & Analysis Report.

Vinay Mathews, Founder & COO, Faircent.com, commented, “It is impossible to deny the crucial role the alternative lending sector, and online P2P lending in particular, has played in supplying credit to MSMEs in wake of the current liquidity crisis among NBFCs. Faircent.com is committed to working consistently towards scaling up their technology and operations to reach largely underserved or unserved consumer segments across India. . As our latest report states, Faircent.com has achieved great strides on this front by creating avenues for small businesses and credit-worthy consumers in Indian hinterland to avail funds in the simplest and more affordable manner.”

Last week the platform had released loan disbursement figures that showed that loan funding to borrowers from Tier-3 cities have tripled while to borrowers from Tier-2 cities has nearly doubled since the last year. It is noteworthy that a large population of India’s population – both individuals and small businesses – that resides in tier 2 and tier 3 cities with little or no access to organized lending. Faircent.com’s foray into these smaller towns and semi-urban areas of India is another step in direction of financial inclusion.