UPI Emerges As Dominant Payment Mode In Peer-To-Peer Lending Platforms

Unified Payments Interface (UPI) has emerged as the dominant payment method among lenders on peer-to-peer (P2P) platforms, accounting for 91.89 per cent of all transactions, according to the P2P Lending Trends Report 2025 released by LenDenClub, a Reserve Bank of India (RBI)-registered peer-to-peer lending platform. The report, which analysed investment activity of over one lakh lenders, points to a shift towards digital-first and more structured lending behaviour.

UPI Dominates Other Payment Modes By A Wide Margin

UPI has dominated the payment modes by a wide margin. The Immediate Payment Service (IMPS) and net banking account for 3 per cent each, whereas the debit card mode accounts for 2 per cent of the transactions carried out on the platform.

Female Lenders Invest Larger Amounts Than Male Counterparts

The report also highlighted that the amount invested by the female lenders is higher compared to the amount invested by their male counterparts. The amount invested by the female lenders averaged at Rs 2.5 lakh, which is over four times the amount invested by the male counterparts.

Diversification Gains Traction Among Investors

Around 68 per cent of investors have funded more than one loan. This indicates that investors are increasingly opting for diversification. On average, investors have funded over 200 borrowers. Additionally, they have also invested in multiple borrowers to diversify their portfolio. The average investment size stands at approximately Rs 2 lakh, with funds typically distributed across multiple borrowers.

Preference For Short-Term Lending

Investor preference for shorter tenured loans continues. The loans on the platform are mostly for a period of two to six months, and over 95 per cent of all loans are short-term loans. Recently, a 12-month loan option has been made available on the platform, and this is already seeing traction, as investor demand for more predictable repayment options soars.

Metro Cities Continue To Lead Participation

The investor participation remains concentrated in major metro cities like Mumbai, Bengaluru, Pune, Hyderabad, and Delhi. These cities account for nearly 62 per cent of the total contribution. At the same time, the report noted increasing participation from beyond these centres, indicating gradual expansion.

Mobile Devices Drive Lending Activity

The report also found that the majority of the lending transactions are carried out using mobile phones. This shows the push towards real-time and on-the-go portfolio management with the widespread use of smartphones and seamless digital payment infrastructure.