There is a lot of curiosity over peer-to-peer lending as an upcoming alternative avenue to earn good returns in the short term. Rajat Gandhi, Founder & CEO, Faircent, says it is equally important to understand the risks involved. 

P2P is still at a nascent phase. Do you think lenders completely understand the risks?

P2P is just an alternative platform for lending. Everyone understands the risks around lending. People need to be educated about the risks to avoid. For example, incidents like misselling. Faircent was the first to push for RBI regulations and also the first to receive NBFC-P2P certification. The current regulations are good enough to protect the interests of the lenders and other stakeholders. After the RBI regulations, risks have been eliminated to a large extent. 



Is there anything the company is doing to educate the prospective lenders about these risks?

Faircent has been trying to educate lenders and borrowers through its blogs. We are looking at investment workshops to reach more people. Also, we are displaying all our delinquency data and default rates very transparently on the website. 

 

How will P2P contribute to the economic growth in the next 10 years or so?

P2P will be a good substitute in a credit-starved country like us, especially for the micro SMEs. They help in employment generation for the economy and are a good set of borrowers for us. We believe P2P should positively contribute in the credit growth. Secondly, it will unlock utilised wealth for the lenders. It will grow slowly and steadily. 

Click here to read his full interview with https://economictimes.indiatimes.com/wealth/p2p/p2p-has-great-potential-but-too-early-to-compare-with-equities-/articleshow/65436558.cms