About 61% Of P2P lenders Are Millennials And GenZs: Report

Millennials and Gen Z are driving India’s peer-to-peer (P2P) lending growth, with 61 per cent of lenders under the age of 40, according to LenDenClub’s Manual Lending Pulse report. This pioneering study sheds light on lender behaviour and trends in the P2P lending sector, reflecting the rising influence of younger investors and digital payment systems.

The report highlights that 36 per cent of lenders fall within the 26-35 age bracket, while 25 per cent are aged 36-45. It also notes that over 60 per cent of lenders achieved returns exceeding 20 per cent, making P2P lending a competitive alternative to traditional investment avenues. However, 14 per cent of participants reported partial losses, highlighting the inherent risks of the sector.

Maharashtra emerged as the top contributor, accounting for 23 per cent of the lending volume and 40 per cent of the lender count, followed by Karnataka at 20 per cent. Interestingly, states like Bihar and Chhattisgarh also reported significant activity, demonstrating the sector's reach beyond economically advanced regions.

Men dominate the lender base with 72 per cent of the volume, but women account for 21 per cent, marking an encouraging trend of rising female participation in P2P lending.

The report emphasises the role of digital solutions like UPI, which 90 per cent of lenders use for transactions, underscoring a shift towards convenience and efficiency. Short-term commitments are also preferred, with 34 per cent of lenders opting for three-month tenures, reflecting a growing appetite for quicker returns and active fund management.

Manual lending, where individuals select specific loans to fund, is becoming a popular choice in India. "This report is a testament to how P2P lending empowers individuals with attractive returns while fostering financial inclusion in underserved regions," said Bhavin Patel, Co-founder and CEO, LenDenClub.

Based on data from 13,107 lenders between November 2023 and October 2024, the report highlights the potential of P2P platforms to bridge financial gaps and provide alternative financing solutions, solidifying its role in India's evolving financial landscape.