Alternative models of lending and capital raising are coming up and have the potential to change the market dynamics of traditional lenders and the role of traditional intermediaries. Crowd-funding, which entails raising external finance from a large group of investors, is at a very nascent stage in India.
The peer-to-peer (P2P) lending for which RBI has issued Master Direction in October 2017 has the potential to improve access to finance for small and medium enterprises. Eleven entities have been licensed to operate P2P platform. The Reserve Bank has also granted licenses and permitted seven purely digital loan companies (NBFCs) to commence operations.