Women entrepreneurs are prudent borrowers, investing in them pays off: Neha Juneja of IndiaP2P

IndiaP2P was founded in 2021 by Neha Juneja as a platform that focuses on empowering women entrepreneurs. With 96% of its borrowers being women leading SMEs, particularly in rural areas, IndiaP2P has grown through partnerships with organizations and microfinance institutions in regions like Nagaland, the southern states and Maharashtra, providing essential capital to these entrepreneurs. In a chat with ETDigital, Juneja, CEO and co-founder of the platform, talks about what she wants to achieve and why IndiaP2P has opted for it. Women entrepreneurs and the role of the regulator in the fintech space. Edited excerpts.

Economic Times (ET): When did IndiaP2P start and what was the idea behind it?

Neha Juneja (NJ): We started our operations in 2022 with the central thesis that women and small business Homeowners are prudent borrowers. Investing in them is profitable and useful, given the direct and secondary effects they have in allowing income expansion, especially for women.
Based on this thesis, we now source loans predominantly from women-owned businesses across the country and select them for retail lenders to lend to.

ET: The P2P sector in India has been around for some time and has some established players. How do you plan to make an impact?
NJ: Our differentiation is our target borrower base and loan underwriting. We have tailored processes and algorithms to source and evaluate small loans (up to Rs 100,000). Our lending practices make it easier for women to get loans compared to traditional lenders.

ET: Given changing economic conditions, what role should P2P play in supporting growth?

NJ: Adequate credit is a critical component of economic growth. While we have seen solid overall growth in recent years, credit gap Peer-to-peer (P2P) lending remains highly popular in the small business, nano-enterprise and MSME segments, which are not only major job creators but also critical levers for growth. Peer-to-peer (P2P) lending unlocks capital from a new source, namely retail investors, who are currently outside our formal credit ecosystem. Furthermore, it enables certain efficiencies in the credit value chain, thereby reducing costs. This new source of capital, used efficiently, has great potential to bridge this credit gap and financial inclusion.ET: P2P promised low interest rates for borrowers while simultaneously offering attractive rates of return for lenders. How did this play out?
NJ: P2P lending has been successful in delivering attractive returns for investors. While it does involve risks, this type of investment offers the comfort of being regulated by the RBI. As for the borrower, we understand that interest rates are competitive, but not significantly lower than the market norm.

ET: The RBI introduced the regulatory framework for the sector in 2017. What role does this framework play in supporting the sector? Are there any grey areas?
NJ: This is a regulated sector and the role and guidance of the regulator is of utmost importance. The RBI has been widely appreciated and respected for its development of peer-to-peer lending guidelines, which have led to the development of this nascent industry.

The financial services sector in general is evolving very quickly and P2P lending, given its new and digital nature, is also gaining momentum. The regulator is keeping an eye on these developments and developing its guidelines and directives accordingly.

ET: The RBI has also been keeping a close eye on the functioning of the fintech sector of late. What is your take on some of the measures and actions taken by the central bank?

NJ: We have seen a rapid expansion of digital financial services in recent years. There has been a proliferation of digital loans, digital assets, investments and so on. Any regulator would be very attentive to the rapid expansion of new formats and from this point of view, as operators, we expect regulations to evolve and change as well.

ET: What is the pace of innovation in the P2P sector and what can we expect next?
NJ: We can expect more innovation in the P2P sector, making it easier for lenders to invest for the long term and earn regular returns.
Today, most alternative investments are considered short-term options. If P2P lending becomes longer-term, it will become a common option for Indian savers and investors.

ET: How has the business been since you started and how has this fiscal year been for you?
NJ: As a founding team, we all have prior entrepreneurial experience. We can safely say that this company found product-market fit and quick traction from the start. We are now backed by over 100,000 users and some of the best venture capitalists in the market.

ET: What are your plans for IndiaP2P and how do you plan to achieve greater impact?
NJ: We are expanding our operations and adding new lending and investment products. Overall, our impact increases with our scale. We are committed to expanding our scale with our target borrower segment and developing products that generate real economic and social added value.