P2P lending is growing among millennial women, study finds

By Puja Sharma

With rising education and awareness levels of financial products, an increasing number of women have appeared to take their own financial decisions. Indian women were perceived to be disinterested and unaware of their financial management, but the situation seems to be changing.

According to analysis, there has been a whopping 430% rise in female investors in the P2P lending space in the financial year 2022 compared with FY21. There has also seen a 150% increase in female borrowers on the borrower side y-o-y basis. The study was conducted on the data from 20,165 women investors and borrowers in P2P lending for the period between April 2021 to March 2022.

Mumbai, India’s financial city, ranked top, followed by Hyderabad, the city of Nizams, in terms of the highest number of female borrowing from P2P lending platforms as per the data. LenDenClub, the country’s leading Peer-to-Peer (P2P) Lending platform, released the report of women investors and borrowers on the lending platform. The data further revealed that Mumbai, Bangalore, and Hyderabad lead the race in terms of women investing in P2P space.

The report further revealed that young and social media-friendly women are much ahead of previous generations when it comes to borrowing or even availing of the P2P lending platform as an investment asset class. Millennial women aged 21-30 years were the most active borrowers, i.e. 56%, and lenders, i.e. 54%. It was followed by the cohort in the age group of 31-40 years that accounted for 37% and 33% in the case of borrowers and lenders, respectively.

Data highlights that Peer-to-Peer Lending is fast emerging as an alternative investment option for women. According to the study, the highest number, i.e. over 50% of women, fall in the age group of 31 to 40, and the average amount invested is INR 50,000 in P2P lending. Of the women who invested in the platform, 100% of them re-invested their money. Female investors in P2P come from metro cities. Hyderabad, Bangalore, and Mumbai are the top cities where these women lenders invested in the asset class.

Bhavin Patel, Co-founder and CEO of LenDenClub, said: “We have witnessed a rise in investments from women, especially during the pandemic. The P2P lending space is regulated by RBI and awareness about it is still low among the women counterpart. It has emerged as a better asset class for the investors and source credit during emergencies for the borrowers.

“We believe that more awareness about the platform will increase participation from women in tier-1 and tier-2 cities. The easy access to online avenues of financial independence encourages women to make their own financial decisions. India can achieve better financial inclusion with more participation from women. We, at LenDenClub, help our women investors diversify their portfolios with high investment rates, while we encourage women borrowers to take out instant loans in times of need.” he added.

With rising education and awareness levels of financial products, an increasing number of women have appeared to take their own financial decisions. Indian women were perceived to be disinterested and unaware of their financial management, but the situation seems to be changing amid the pandemic.

Due to the pandemic, females mostly borrowed from medical emergencies to care for themselves and their family’s healthcare. Data revealed that most women borrowed from the platform in April 2021, when Covid’s second wave was at its peak. Women also borrowed money for educational purposes indicating that they are career-focused and planning their future effectively by availing credit facilities from P2P lending platforms. The data revealed that Hyderabad & Mumbai were the top cities where the most women benefited from credit.

Women seem to be more particular about repayment of their loans, resulting in LenDenClub experiencing only 3.37% of women delayed or defaulted in the payment. They borrowed amounts as high as Rs 7 lakh and as low as Rs 10,000, whereas the average ticket size of borrowing stood at Rs.70,000. The platform saw over 50% of women borrowers fall between 21 to 30 years of age, indicating that women from Gen-Z and millennial cohort, who are also more acquainted with technology, are comfortable taking digital loans.

Key highlights

• Around 430% and 150% rise in women investors and borrowers respectively in FY 21-22.
• Mumbai and Hyderabad ranked top in terms of women investing in P2P lending.
• Witnesses 150% Y-o-Y growth in women borrowers across the country.
• More than 36% of all female borrowers returned to reapply for a loan.
• With only a 3.37% default rate; females prove to be better borrowers than men.