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Peer To Peer Lending Gains ..


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  • 1. Peer-to-peer lending gains prominence Advanced Search Welcome, Guest Feedback | RSS Login| Register Content Guide Monday, Oct 12, 2009 Follow us on Home | Markets & Investing | Companies & Industry | Banking & Finance | Economy & Policy | Opinion | Life & Leisure | Mgmt & Mktg | Tech World | BS Products Section Home | News Now | Today's Paper | Columnists | BS Says | Money & Forex Markets | Q&A | Bank | Insurance | Monetary Policy | Banking Annual Home > Banking & Finance Live Markets | Smart Portfolios II Search: Keyword Peer-to-peer lending gains prominence Press Trust Of India / New Delhi November 07, 2008, 0:10 IST As the financial turmoil rages on , a relatively new practice of lending and borrowing without intermediaries such as banks is emerging through online sharing of money. According to a study by market intelligence and data analysis services provider Grail Research, ‘peer-to-peer lending’, which refers to an individual or Business Banking a group lending money to a person in need without any intermediary, is fast Get a Business Checking emerging and may reduce dependence on banks. Account & Check Card That Save You Money. The market size of the country’s informal lending market is estimated to be $90-100 billion (Rs 4-5 lakh crore), with rural areas accounting for bulk of the market. Of this, just 30-35 per cent is supposed to be managed through friends and family networks including the emerging new platform of ‘peer-to-peer’ Islamic home financing Murabahah - A guide to lending. providing clarity on Islamic home financing This new form of loan is more popular among people, belonging to low-income Most Popular groups, who do not have easy access to bank loans. “P2P lending is one of Web 2.0’s less-appreciated applications. By eliminating Read E-Mailed Commented intermediaries such as banks, it creates better outcomes for both borrowers Also Read and lenders. We expect it to be a key threat for traditional lenders such as - Taxmen give tax code the thumbs-down News banks in the long term,” Grail Research Country Head Amit Kumar said. Paper Specials - Road mobility gives Agni-5 global reach Now - IIP numbers, FM speak propel - Mukesh refuses to hum Anil's tune While the lack of a fully-functional credit bureau inhibits its application in traditional form, it is also leading to innovations such as use of micro-finance markets NEWSALERT: Indiabulls Power IPO - institutions (MFIs). “We consider its potential impact to be on a par with other - I&B Ministry compendium on subscribed 2 times innovative models such as ITC’s e-choupal,” Kumar added. policies, programmes - Gmail No.1 E-mail Service in India - CEO salaries: One has to pay Unlike traditional banks, which are governed by the Reserve Bank of India talent, says Ficci More regulations, P2P lending is more independent and flexible on various points. - GSM operators post lower subscriber additions in Sept “In the P2P system, the rate of interest at which one takes loans is negotiable. - Jubilant Foodworks to raise up to Unlike regulated banks’ practice, paper work and credit checks of borrowers Rs 300 cr via IPO are not so important here, which ultimately saves time,” Kumar said. More These firms mainly target poorer segments as they do not have access to formal banking. Moreover, a host of micro-credit institutions operating in India are unable to meet the entire demands of the country. Traditionally, people prefer banks and other similar institutions as they are considered more reliable than lesser-known financial firms. However, a number of P2P lending firms, such as dhanaX, Range De and GlobeFunder, have emerged in recent times but are in initial stages and need protection and support from the government for accelerated growth, the study said. The internet plays a major role in the fledgling industry as P2P lending through portals of such companies involves online sharing of money between users. “Borrowers put up their profiles and make requests for loans on the portals, which the lenders can view. The entire process helps the borrower and the lender gets interest rates that are acceptable to both parties,” Kumar said. BS Poll Cast Your Vote Did Obama deserve the Nobel Peace Other Stories Prize? -IIP numbers, FM speak propel markets Yes No -India pips China to become fastest growing telecom market -Jubilant Foodworks to raise up to Rs 300 cr via IPO -IIP to accelerate on restocking, externalities: Moody's -FIIs net buyers of Rs 963 cr in cash mkt today 1 of 2 10/12/2009 10:11 PM