This innovative model confers considerable advantages, especially for borrowers who encounter difficulties in securing loans through conventional channels—such as individuals with subpar credit scores or limited credit histories. By leveraging P2P lending platforms, these borrowers gain access to necessary funding from individual lenders willing to accept associated risks in anticipation of higher returns.

“As our parents or in-laws enter the 60s club, the financial landscape can be rocky. In such a scenario, alternative investment options bring the benefit of providing a stable, secure future for them and their families to the table. Alternative investment instruments are a great way to diversify investment portfolios with options like P2P lending, NCDs, government schemes, REITs, etc. This way, senior citizens can seamlessly manage their finances and build resiliency for the future. One of the effective ways to diversify their investment portfolio, alternative investments also bear inflation-hedging capabilities against market volatility and reduce overall risk,” Rustagi added.

P2P lending in India is governed by the Reserve Bank of India (RBI). Within this framework, investors earn interest on the amounts they lend. Similar to the interest earned from other financial instruments such as Fixed Deposits (FDs), the income generated through P2P lending is liable for taxation.

“P2P lending is an RBI-regulated asset class that helps investors generate stable returns. The P2P lending platforms offer senior citizens an opportunity to diversify their investment portfolio and potentially earn high returns. The process revolves around lending funds to the top 2% of the creditworthy borrowers and earning up to 11-12% per annum returns. It thus is a flexible investment avenue, providing a choice between monthly interest payouts for immediate cash flow or compounding interest to maximise long-term growth,” Rustagi said.

Beside these there several fixed-term investment plans available for investors, ranging from 1 month to 5 years lock-up. Fixed-income investment options offer returns at a fixed rate over a predetermined period. It is important for investors to understand that the primary objective of these debt instruments is not to maximize returns but rather to preserve capital while providing guaranteed gains.

“There are several fixed-term investment plans available for investors, ranging from 1 month to 5 years lock-up. The stable income returns range from 11% per annum to net annual returns (compounding) of 14.58%, providing flexibility for investors to choose the duration that caters to their financial goals. This way, the P2P lending platforms offer a reliable and stable option for wealth generation,” Rustagi said.