Navigating The Evolving P2P Lending Industry, LendBox Reaches Profitability

All eyes are pointing towards India to be the best-performing economy in the world in the coming years, but one of the strongest pillars for India’s growth is going to be 'access to credit for those who deserve it.' Banks, unfortunately, haven’t been able to bridge this gap because of the gaps that exist in involving the entire nation as part of the broader spectrum of financial inclusion. The gap between the demand and supply of credit to Micro, Small, and Medium Enterprises (MSMEs) in the Indian credit market stands at US$250 to 300 billion. The similar trend has been observed in the unsecured lending space as well.

Assessing creditworthiness has been a challenge for traditional lenders, but with the progress in the digitization of the Indian financial landscape, tech-enabled financial institutions have found their way into solving the credit allocation problem.

One of the most promising solutions that fintech has come up with is P2P lending. A Peer-to-Peer lending platform can be seen as a facilitator where borrowers can directly connect with investors. Such an approach leads to the elimination of intermediaries, therefore leaving better margins for the investor and the platform.

Many Indian P2P lending platforms such as Lendbox, Liquiloans, LenDen Club, & Faircent have already shown a positive growth trajectory.

A P2P lending platform here can be seen as a facilitator between the two parties and looks after various aspects of the lending process such as credit evaluation, loan allocation, onboarding, collection, and recovery, etc.

An investor with the help of such a platform is able to generate stable income returns on their surplus funds/savings. On the other hand, a borrower is able to utilize the deserved credit for their business growth or expansion.

The P2P lending market has already started to grow in India and is predicted to grow at a CAGR of 21.6%, reaching $10.5 billion by 2026. And recently, Lendbox too has turned profitable in March 2023. Lendbox also has now crossed an impressive AUM of 2700+ crores and has so far helped more than 500,000 investors generate more than 130 crores in wealth so far..

Lendbox’s profitability feat has been achieved on the back of new-age innovative lending products and its impressive diversification engine which has helped them grow their loan book with healthy margins. The company was founded by Ekmmeet Singh, Bhuvan Rustagi, and Jatin Malwal in 2015 with a mission to digitize lending through a P2P platform.

As the credit boom in India continued to grow, traditional financial institutions capitalized on the opportunity, but retail investors were left without access. Lendbox bridged this gap and became one of the first platforms to secure an NBFC-P2P license in Jan’2019, leading the charge in the regulated industry.