Hello Friends,
Continuing with my previous blog, I had promised to talk about the new asset class peer-to-peer lending, also called P2P.
Lending has a long history that dates back centuries. Lending has been primarily done with the objective of earning interest.
Primarily, pawnbrokers, financers, and bigger institutions like banks, NBFCs, etc., are involved in the business of lending.
With the advent of technology, lending has become very easy, flawless, transparent and paperless.
Peer-to-peer lending, as it sounds, is where an individual lends money to another individual online.
The online platforms that help us lend money are basically in the business of P2P.
These sites bring credible borrowers onto their platforms, in turn helping us lend money to different classes of borrowers.
P2P as an asset class is gaining popularity because of its higher returns, lower risk, affordability, and less aversion to market volatility.
There are a lot of P2P platforms like Lendbox, Faircent, Finzy, Monexo, etc.
Big corporates are entering the P2P segment to get a slice of this growing asset.
P2P businesses are regulated by the RBI and companies registered as NBFCs. In addition to all others Finzy is my favourite P2P platform.
Finzy is investor-friendly, has quality borrowers, few NPAs, and has ethical and competent management.
With high-quality borrowers on the finzy platform, returns range from 10% to 18% pa. With very few borrowers on the higher side, this allows us to safeguard capital as well as deliver returns.
Finzy helps to diversify capital to a great extent by allowing you to lend money as low as Rs 1,000/borrower. The platform also allows you to reinvest part or full EMIs.
This helps to compound our investment in the long run. Remember, compounding is the eighth wonder of the world.
The minimum amount required to start investing in P2P is Rs 50,000 and the maximum is Rs 5 million. Gear up and give it a try.
Thank you to everyone. Happy Investing!
About the Author :
Nitin Bhandari, a passionate & certified research analyst with over 15 years of experience in Equity Markets and founder of Heet Investment, a financial brooking firm in Bengaluru. You can get in touch with him on nitin@heetinvestment.co.in
Image courtesy : Times of India