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P2P lending- question on guarantee amount to lenders on the platform
26-Dec-2023 (In Banking / Finance Law)
As an nbfc for p2p lending we want to see if we can guarantee a part of disbursed loans for our lenders against default by borrowers so what should be the guarantee % of total loan disbursed
any percentage of the loans can be guaranteed as long as your agreement does specify the percentile and it should not be a continuing guarantee else any amount may get covered in that respect and you as the NBFC will at the peril of the lenders. it is therefore important that your percentage is clearly mentioned, also do mention that it will be a percentage of the principal amount only or the default amount (default principal plus applicable interest)
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Adv. Jash J. Dalia
Mumbai | 100+ Answers
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I am not sure about this but I believe it extends to 10 - 20%. I don't know if there is any RBI circular to this effect. In my opinion it is always prudent to be conservative and wise in terms of lending. Also creative strong lending structure to avoid or minimise potential defaults considering poor contract enforcement in India.
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