HomeMedia CenterNo Credit Enhancement by P2P Lending Platforms

No Credit Enhancement by P2P Lending Platforms

The first version of the RBI Regulations on Peer to Peer Lending platforms was announced in October 2017. In the regulations RBI has focused a lot on bringing transparency in the process of p2p lending. While transparency was the utmost focal point, the RBI did not miss the point to curb mis-selling of this innovative investment instrument. Over promising or mi-selling is observed very often in India while selling financial services product. To curb all these, RBI has very clearly asked P2P Lending platforms not to provide any guarantees or security on the investments under Section 6 (1) (iv).

As per the regulations, any registered P2P Lending platform shall –

  1. Not provide or arrange any credit enhancement or credit guarantee
  2. Not facilitate or permit any secured lending linked to its platform; i.e. only clean loans will be permitted

If you are a new investor in P2P Lending, make sure that your investment platform is following the above scope of activity guided by the RBI. Any peer to peer lending platform, which offers any of the above services, it is now allowed.

For detailed version of the RBI regulations Click Here.

LenDenClub is India’s largest Peer to Peer lending platform which started operations in India in 2015. We have been helping lenders diversify their portfolio beyond traditional investment instruments ever since.

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*Calculated as per the last 6 months’ average returns by lenders who lent for 12 months tenure

LenDenClub, owned and operated by Innofin Solutions Pvt Ltd (ISPL) is registered as a peer-to-peer lending non-banking financial company (“NBFC-P2P”) with the Reserve Bank of India (“RBI”). The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or lending simple interest. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any lending decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ lending amounts.

*This is an annualized yield and is subject to the maximum FMPP tenure, which is 5 years. P2P lending is subject to high risk and may cause an entire loss of principal.
 

*P2P lending is subject to risks. And lending decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

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