What are the demographics of peer-to-peer platform borrowers?

peer-to-peer platform borrowers

Things have changed a lot on the financial scene today. If we go back a decade, you will recall that you had to visit a bank with the self-attested copies of various KYC documents and their originals for the simple task of opening a savings account. Even the private banks required you to furnish hard copies of all documents. The only difference was that they used to send their representative over to your house to collect them. Today, you can open your account in a bank even at 4.30 in the morning. Besides, you can complete the KYC online even at that early hour.

Lending methodologies have also changed in this context, with P2P lending platforms springing up with amazing regularity. Here are some statistics that can sound unrealistic, but they are true. (Information Source – https://www.ibef.org/news/430-rise-in-investments-by-millennial-women-in-p2p-lending-study)
  • LenDenClub, a major P2P lending platform in Mumbai, has researched that Mumbai has the highest number of women borrowers through the P2P platforms. Bangalore and Hyderabad follow closely.
  • Women invest more in P2P lending platforms. Their numbers increased 430% in 2021-22 compared to 2020-21.
  • On the flip side, the number of women borrowers has increased by 150%.
  • The average investment in P2P platforms is Rs 50000, with 100% of women reinvesting their money in the platforms.

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What do the stats reveal?

These statistics show that women borrowers are on the rise in P2P platforms. It is an excellent trend because women borrowers have traditionally been prompt in their repayments. However, the same research showed that 3.37% of women had defaulted or delayed their repayments. Now, that is a fantastic piece of statistics.

The P2P Demographics Shift

The P2P demographics are showing a significant shift from the era of male dominance to women showing more interest in P2P borrowing today. So, maybe, they could overtake their male counterparts quickly enough.

Age-wise stats

Nearly 56% of active borrowers were women in the age group of 21 to 30. Similarly, this age group accounted for the maximum lenders at 54%.

Women in the 31 to 40 age group were second on both lists at 37% and 33%, respectively.

p2p platform borrowers

Purpose wise stats

Women generally borrowed money for medical emergencies. It is understandable because the research period coincides with the second COVID-19 wave that swept across the country.

Secondly, women also borrowed money for education purposes for themselves and their children. It shows that women have demonstrated a career-focused approach.

The stats show that women have used the P2P platforms the best for lending and borrowing purposes. As women have an excellent repayment track record, the P2P platforms have benefited both categories.

What inference can we draw?

These stats show that Indian women have come of age. The fact that they have dominated their male counterparts in the financial sector has come as a pleasant surprise. It marks a tremendous shift in the financial industry and makes the P2P platforms a significant force to contend with. So, today, you have the top corporates like India Bulls, etc., engaging actively in these platforms.

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What do the demographics indicate?

Though the LenDenClub research surveyed a small sample, it shows that women in the metro cities tend to approach the P2P platforms for lending and borrowing actively. Usually, you consider women to be conservative and averse to taking risks. Therefore, the rise of women borrowers and lenders is a beautiful surprise. But unfortunately, even the banks could not match the performance of the P2P platforms.

Naturally, the younger generation of women is featured more in the stats because they are well versed with computers, smartphones, and the latest technologies.

How do chit funds compare with P2P lending?

Chit funds are also a type of P2P lending because the money collected in the pool goes to one of the bidders at a mutually decided rate. So, you can call the chit fund the predecessor of P2P lending in India. Registered chit fund platforms like Money Club work online and ensure excellent returns on investment, much more than what the banks and the stock markets give. So, they have become popular.

Final Thoughts

P2P lending has come to stay in India. It has its roots firmly entrenched in the financial sector today. But, the most exciting part is that user-friendly online platforms have attracted the younger generation. So, there is a paradigm shift in the P2P demographics, with the average age of the user going down by the day. Besides, the P2P platforms have spread to smaller towns to acquire a pan India network.