India Peer to Peer Lending Market Research Report and Industry Forecast

India Peer to Peer Lending Market Size and Share:

The India peer to peer lending market size was valued at USD 7.53 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 42.92 Billion by 2033, exhibiting a CAGR of 21.34% during 2025-2033. North India currently dominates the market in 2024. The market is driven by the rising demand for accessible credit solutions among underserved borrowers and small enterprises, particularly in tier 2 and tier 3 cities. Advancements in digital infrastructure, along with the use of AI-driven credit assessment tools, are streamlining approval processes and enhancing borrower experience. Favorable regulatory frameworks and increasing investor participation are further augmenting the India peer to peer lending market share.

The global market is primarily driven by the increasing demand for alternative credit sources among underserved and thin-file borrowers. In line with this, the expanding internet penetration and smartphone adoption are also providing an impetus to the market. Moreover, the rising confidence in digital financial services supported by improved user experiences is also acting as a significant growth-inducing factor for the market. In addition to this, the limited accessibility to traditional bank loans among small businesses and self-employed individuals is resulting in a higher reliance on decentralized lending platforms, creating a positive India peer to peer lending market outlook. In 2025, P2P lending was recognized as a transformative solution for MSMEs in rural India, directly connecting retail lenders with borrowers and eliminating intermediaries like banks. This model addresses financing gaps, especially for self-employed professionals and small businesses in tier 2 and 3 cities, benefiting underserved regions where MSMEs contribute 29% to India's GDP, create 11 crore jobs, and account for 40% of exports, leveraging technology and data-driven underwriting.

Besides this, the transparent pricing models and quick disbursal mechanisms offered by digital lenders are creating lucrative opportunities in the market. Also, the integration of artificial intelligence and data analytics for credit risk assessment is impacting the market positively. The market is further driven by the implementation of enabling regulatory frameworks that provide legitimacy and operational clarity to platform operators. On February 25, 2025, fintech platform Cred announced modifications to its peer-to-peer (P2P) lending product, Cred Mint, to comply with the latest Reserve Bank of India (RBI) regulations introduced in September 2024. These modifications include ensuring compliance with new onboarding requirements for customers and aligning investment processes to the updated framework by implementing updates to risk management, transparency measures, and operational procedures. Apart from this, strategic partnerships between fintech firms and non-banking financial companies (NBFCs) are propelling the market. Some of the other factors contributing to the market include demographic shifts toward younger borrowers, growing financial literacy, increased investor participation seeking higher returns, and continuous technological innovation within the digital lending ecosystem.

India Peer to Peer Lending Market Trends:

Growing digitalization efforts

The rising digitalization efforts are offering a favorable India peer to peer lending market outlook. With the increasing penetration of smartphones and internet services, borrowers and lenders are connecting through digital platforms without the need for traditional banks. According to the International Trade Administration, by mid-2024, the number of smartphone users exceeded 650 Million, while internet subscriptions surpassed 950 Million. Fintech companies are leveraging artificial intelligence (AI), big data, and blockchain technology to streamline the lending process, making it more secure and efficient. Online verification, automated risk assessment, and digital loan disbursals are reducing paperwork and processing time, attracting more users and leading to India peer to peer lending market growth. Digital payment systems like unified payments interface (UPI) and electronic wallets (e-wallets) are also making transactions seamless, further driving the demand. The Government’s encouragement for digital banking and financial inclusion is enabling more people to explore digital lending options. Additionally, investors looking for higher returns are employing peer to peer platforms to lend money directly to borrowers. The growing trust in digital financial services, reinforced by secure online transactions and regulatory frameworks, is supporting the market expansion.

Expansion of gig economy

The expansion of the gig economy is one of the important India peer to peer lending market trends bolstering market growth. Because of the rise in the number of freelancers, independent workers, and small entrepreneurs, the need for quick and flexible financing options is high. The Economic Survey 2024-2025 revealed that the proportion of self-employed people in India's workforce rose to 58.4% in 2023-24, up from 52.2% in 2017-18, reflecting the broadening of entrepreneurial activities and a preference for flexible work arrangements. Traditional banks often have strict lending criteria, making it hard for gig workers to secure loans due to their irregular income patterns. The peer to peer lending platforms are filling this gap by offering easy access to credit without the lengthy approval process of conventional banking. Many gig workers need small loans to invest in equipment, expand their services, and manage daily expenses, and peer to peer lending provides a convenient alternative. Digital platforms use advanced algorithms to assess borrowers based on work history, earnings, and credit behavior, making lending more accessible. As remote work and digital freelancing continue to grow, more people are turning to peer to peer lending for financial support, making it an essential part of the expanding gig economy.

India Peer to Peer Lending Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the India peer to peer lending market, along with forecasts at the regional levels from 2025-2033. The market has been categorized based on business model and end user.

Analysis by Business Model:

• Traditional P2P Model
• Marketplace Lending Model

Marketplace lending model stands as the largest component in 2024, holding around 65.8% of the market. This segment’s dominance stems from its scalability, investor diversity, and seamless digital integration, allowing platforms to match borrowers and lenders with greater speed and transparency. Unlike traditional peer-to-peer models, marketplace lenders leverage advanced analytics, AI algorithms, and data-driven underwriting to manage risk and automate approvals. These platforms often collaborate with institutional investors, NBFCs, and banks, expanding their lending capacity and reach. Additionally, the marketplace model offers flexibility in loan customization, competitive interest rates, and simplified user interfaces. As a result, it appeals strongly to both retail borrowers and investors, reinforcing its lead in India's digital lending ecosystem.

Analysis by End User:

• Consumer Credit
• Small Business
• Student Loan
• Real Estate

Consumer credit leads the market with around 75.0% of market share in 2024. The dominance of consumer credit is supported by rising personal financing needs, ranging from medical emergencies and travel to weddings and lifestyle purchases. With many individuals lacking access to formal banking services or traditional credit scores, P2P platforms have emerged as alternative lending solutions for unsecured loans. Consumer borrowers value quick approvals, minimal documentation, and competitive rates offered through these platforms. Additionally, younger demographics and gig economy workers prefer the flexibility and digital convenience of peer-to-peer loans. The segment’s sustained relevance is also driven by the affordability gap in traditional credit, making digital lending a vital channel for personal finance.

Regional Analysis:

• North India
• South India
• East India
• West India

In 2024, North India accounted for the largest market share. North India’s lead is attributed to its high urban concentration, digital infrastructure, and rising financial literacy across key metropolitan cities such as Delhi, Chandigarh, and Jaipur. The region exhibits a large population of self-employed professionals, students, and salaried individuals who frequently rely on non-traditional lending solutions. Government initiatives around financial inclusion and startup ecosystems in northern states have further supported fintech adoption. Additionally, increasing smartphone penetration and digital payment familiarity are contributing to robust borrower and lender activity on P2P platforms. The competitive presence of fintech firms in this region, along with strong investor networks, further amplifies market engagement and expansion.

Competitive Landscape:

Key players in the market are focusing on leveraging advanced data analytics, AI-powered credit assessment tools, and machine learning algorithms to enhance borrower profiling and reduce default risks. They are expanding strategic partnerships with NBFCs and payment gateways to strengthen backend infrastructure and streamline loan disbursals. To improve investor trust and regulatory compliance, leading platforms are implementing robust transparency measures and real-time reporting dashboards. Additionally, companies are targeting underserved regions through vernacular interfaces, mobile-first platforms, and personalized financial products. According to the India peer to peer lending market forecast, these innovations are collectively improving user experience, widening access, and accelerating digital adoption across the lending ecosystem.

The report provides a comprehensive analysis of the competitive landscape in the [India peer to peer landing market with detailed profiles of all major companies.

Latest News and Developments:

• April 2025: Per Annum, a P2P lending platform, launched ‘Estates’ to enable retail investors to access premium real estate through fractional ownership. With entry points starting at ₹10 lakh, Estates focused on value appreciation over rental yields and offered end-to-end investment management, expanding alternative investment avenues beyond traditional lending.
• January 2025: LenDenClub, a well known non-banking financial firm operational in India, launched daily earning loans for peer to peer lenders, providing daily interest payouts and various loan tenure options. The platform reported a user base exceeding 2 Crores.
• October 2024: IndiaP2P introduced a new version of its service named the ‘Monthly Income Plan-Plus’, which complied with the RBI’s revised quicker settlement regulations for peer to peer lending. Creditors using the platform could receive monthly payouts of up to 18% annual interest (after fees), which included both the principal and the interest. This update reinforced their stance that peer to peer lending should be regarded as a medium-to-long-term choice instead of a short-term liquid alternative.

India Peer to Peer Lending Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the India peer to peer lending market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the India peer to peer lending market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the India peer to peer lending industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.