ET Bureau HYDERABAD: Ahead of the final RBI guidelines to regulate peer-to-peer lending startups, which is expected to be released by the end of this month, P2P companies are in the process of forming an association with an aim to create a fair practice code within the industry players and grapple with ethical issues together.
Tentatively named as the Alternate Finance and P2P Lenders Association, the members of the association plan to register it in Chennai and finalise the formalities by the end of this month, according to Shankar Vaddadi, founder of Hyderabad-based i-lend.
“We will establish a fair practice code so that there is no misrepresentation,” Vaddadi told ET. “Since the industry is at its infancy, we will establish guidelines for disclosure, ethics and so on.” Some of the founding members include the likes of Faircent, i-lend, LoanMeet, Lend-Box, Monexo, among others.
Vinay Mathews from Faircent thinks that on the one hand this association would form a unified voice to address their common problems, and on the other hand, it plays a larger role of educating everyone about peer-to-peer lending.
“Even though peer-to-peer lending startups have been around for a few years, there is not much awareness,” said Mathews, cofounder of Faircent. “Through this association, we can educate people and the industry can grow.”
Experts think that while this is a positive sign that the players will now have a collective voice and a platform to share their learnings, it is too early to tell if this step would foster the growth of this sector. “Having an association is good, and it sort of goes with the whole peer-to-peer concept,” said Sanjay Swamy, managing partner at Prime Ventures, a fund that focuses on fintech startups.
“But growth of this sector depends on the RBI guidelines. If the final guidelines are as progressive as their initial draft, this industry could shape very quickly.”
Tentatively named as the Alternate Finance and P2P Lenders Association, the members of the association plan to register it in Chennai and finalise the formalities by the end of this month, according to Shankar Vaddadi, founder of Hyderabad-based i-lend.
“We will establish a fair practice code so that there is no misrepresentation,” Vaddadi told ET. “Since the industry is at its infancy, we will establish guidelines for disclosure, ethics and so on.” Some of the founding members include the likes of Faircent, i-lend, LoanMeet, Lend-Box, Monexo, among others.
Vinay Mathews from Faircent thinks that on the one hand this association would form a unified voice to address their common problems, and on the other hand, it plays a larger role of educating everyone about peer-to-peer lending.
“Even though peer-to-peer lending startups have been around for a few years, there is not much awareness,” said Mathews, cofounder of Faircent. “Through this association, we can educate people and the industry can grow.”
Experts think that while this is a positive sign that the players will now have a collective voice and a platform to share their learnings, it is too early to tell if this step would foster the growth of this sector. “Having an association is good, and it sort of goes with the whole peer-to-peer concept,” said Sanjay Swamy, managing partner at Prime Ventures, a fund that focuses on fintech startups.
“But growth of this sector depends on the RBI guidelines. If the final guidelines are as progressive as their initial draft, this industry could shape very quickly.”
Get Unlimited Access to The Economic Times
