How to Obtain Peer to Peer Lending NBFC License?

NBFC P2P companies use Peer to Peer Lending model to provide credit to borrowers. These models are often termed as social lending/cloud lending model as it involves individuals lending money to borrowers without an intermediary financial institution. As this model removes the middlemen involved in the process of crediting and borrowing money, P2P lending NBFCs are becoming increasingly popular. With the rise of middle- and low-income populations in India there is an increase in demand for loans and hence, starting a new P2P NBFC is an attractive business prospect. The P2P NBFCs are regulated and registered by RBI after being registered as a company in the Registrar of Companies (RoC). The process of getting P2P NBFC registration and license is cumbersome and hiring experienced finance and legal consulting firm for NBFC registration is recommended by experts.

Advantages of Opening a P2P NBFC in India

• Utilizing Market Space of Small Business Owners
• Higher returns for credit investors compared to traditional investment methods.
• Diversification options are more for investors.
• Higher Profit Margins Due to Unrestrictive Interest Rates
• Portfolio creation is allowed for such investments.
• Financial Inclusion of Potentially Risky Borrowers
• Freedom in terms and conditions ensures a hassle-free experience for borrowers.
• Serving a large consumer base that serves long term prospects of the business.

The procedure of P2P NBFC Registration

Experienced legal professionals will assist in completing the registration in the following steps:

· Start by registering your NBFC as a public or private company with the government.

· The company must have an efficient IT system infrastructure to operate and should submit documents verifying the same procedure.

· Raise Authorized Paid-up Capital of Up to Two Crores.

· After raising this sum the company will be required to open a fixed deposit account with a bank to keep the money. Now, they must obtain a Certificate of no lien from the bank before going ahead with the process of registration.

· Experts will compile all the certified copies to complete the checklist of RBI Registration

· Once all the documents for registration are ready, experts will fill the online application form for NBFC registration. After filling the form, the company will get an autogenerated Company Application Reference Number or CARN which will be used as a reference number in all further communication with RBI.

· In the next step, all the physical copies of necessary supporting documents compiled with the application form will be submitted to the regional RBI Office to complete the process of NBFC registration.