That the P2P lenders can become a significant source of finance for the small borrowers is evident from the UK example where the P2P lending represents about 14% of the new lending to the SMEs.3 A NESTA survey in the UK suggests that around 55–60% of peer-to-peer business borrowers were either refused bank credit or they had not approached banks considering they were not credit worthy enough.
Though, corresponding data is not available for India, I believe the position in respect of refusal of credit to potential borrowers may be more acute. FinTech lending companies and the market place based lending, thus, have an underlying potential to emerge as an alternative source of finance for the small businesses.