When peer-to-peer (P2P) lending platforms were getting off the ground in India in 2015, Ashish Bansal was among the first people to get on board. Like investors in countries like the US and China, he saw promise in these platforms’ premise. They paired willing lenders—usually high-income individuals such as Bansal—with borrowers that banks and other financial institutions didn’t want to touch.
In exchange for taking on risky borrowers, lenders got to charge higher rates of interest, potentially enjoying returns of over 25%. For Bansal, an angel investor in his own right and a high-ranking corporate executive for the last decade, it seemed like a no-brainer.