It is well-established that Peer to Peer lending is a brilliantly innovative form of finance assistance and is helping the government drive its vision of financial inclusion successfully. In 2015-16 more than 10,000 businesses across UK benefitted and an estimated 30,000 new jobs were created due to UK government’s favorable policies for the P2P lending sector.
In India, the industry needs government support to boost its efforts towards furthering the cause of financial inclusion. We propose a three-pronged strategy for the same. Firstly, limits imposed on individual lending through P2P lending platforms are restrictive, and will inhibit the growth of the sector. The exposure of lenders and borrowers should be driven by the market, and not mandated by regulation. Secondly, the government of India can extend financial support to the sector by directly funding or co-funding SMEs and MSMEs through registered P2P lending platforms. Finally, the government can support P2P lending through its tax policies by making interest earned through P2P loans tax-free and allowing tax-payers to offset or write-off bad-debts in one P2P company against the interest earned at another P2P company.
@Technuter.com News Service