Written by Harwansh Tiwari — Bengaluru-based personal finance builder and founder of NiyamFin. Educational only; not financial advice.
Published · Last reviewed: · Data checked: · Reviewed yearly or after major regulatory changes
Sources: Income Tax Department, RBI, SEBI, PFRDA, IRDAI, AMFI · See methodology
Peer-to-Peer Lending in India: Structure and Risks
Understand NBFC-P2P intermediation, borrower default, liquidity and concentration risk without return or allocation claims.
Quick answer
EstimateAn RBI-registered NBFC-P2P is an intermediary. The lender bears credit, concentration and liquidity risk; registration does not create deposit insurance or a minimum return.
An RBI-registered NBFC-P2P operates an intermediary platform between lenders and borrowers. It is not a bank deposit and the platform cannot assure repayment or a minimum return.
Risks
- Credit risk: the lender bears borrower default risk, including possible loss of principal and interest.
- Liquidity risk: a loan may not be repayable or transferable before its contractual schedule.
- Concentration risk: exposure to a small number of borrowers can make individual defaults more significant.
- Platform and servicing risk: the intermediary's controls, disclosures and servicing arrangements matter.
- Tax and recordkeeping: interest and losses require treatment under the law applicable to the lender and period.
The RBI has specifically cautioned against presenting P2P lending with assured minimum returns or liquidity features. Regulation of the platform does not create deposit insurance or a repayment guarantee.
NiyamFin does not provide an expected return, suitability label or portfolio percentage for P2P lending. Review the current RBI directions, platform disclosures, borrower-level exposure and loan documents before participating.
Sources
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Data sources checked
Source-dependentData last checked: 2026-10-08
Rules, rates, and regulatory details can change. Use the source links below to verify current facts before acting.
Disclaimer
This article is for general education only. It does not provide financial, investment, tax, insurance, lending, or legal advice and should not be used as the basis for financial decisions.