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Make Money like a bank on IndiaP2P

Mar-28-2022


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Many of us believe a bank's fixed deposit to be one of the safest investments available. Have you ever wondered how our investments are managed by banks or other financial institutions (FIs)?

Banks, like other financial institutions, borrow money from the general public in the form of fixed deposits or other market instruments and then lend it to borrowers at a higher interest rate. The difference between the deposit rate and the lending rate is kept by banks and financial institutions.

We all know, and some of us may have personally experienced, that lending money carries the danger of default. So, how do banks making a profit while handling such risks?
Banks diversify their loans across numerous borrowers, regions (cities/states), and types of borrowers to lower the risk of loan defaults (corporate, retail). Simply put, banks do not put all of their eggs in one basket; instead, they lend to millions of borrowers across the country, lowering the probability of borrowers defaulting. By lowering the default risk, banks assure that they will have enough money to pay back the deposit when it is due, while also earning a good margin.

Furthermore, banks have access to a variety of legal and recovery methods, including but not limited to CIBIL and professional recovery employees, that ordinary people do not have when lending to peers on their own.

Introducing IndiaP2P, a platform that allows consumers to create their own diversified loan portfolio, which is professionally managed like a bank or financial institution, lowering the risk of default and investment losses.

Click here to join our early waitlist.

 

Author: Ravinder Voomidisingh

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