Nearly two years after the Reserve Bank of India's regulatory overhaul of peer-to-peer lending, Lendbox and its affiliate Per Annum are drawing fresh scrutiny for aggressive marketing of high-return investment products amidst investor complaints and past controversies linked to MobiKwik Xtra.
- Lendbox and Per Annum pitch returns of up to 40%, raising risk concerns
- Investors allege misleading sales practices and liquidity promises
- Past MobiKwik Xtra issues deepen regulatory and legal scrutiny
What happened
Transactree Technologies, the operator of the P2P lending platform Lendbox and the alternative investment platform Per Annum, has attracted scrutiny following reports that its sales agents promoted investment products with exceptionally high returns. These included P2P lending offers boasting returns as high as 14-15%, and fractional real estate investments claimed to yield 30-40%. Investors and prospective customers reported that risk disclosures were minimal and that sales calls painted a positive but potentially misleading picture of return safety based on borrower interest spreads and platform structures.
This situation gains significance due to the company's past involvement with the MobiKwik Xtra product, which also marketed above-market returns but faced criticism after the RBI's tighter P2P lending regulations in 2024. That regulatory shift severely impacted withdrawal capabilities and liquidity, leading to legal complaints and investor backlash. Despite these issues, Transactree maintains active lending volumes and claims to be focusing on compliant and prudent growth amid increasing investor participation.
Why it matters
The concerns around Lendbox and Per Annum cast a spotlight on the ongoing challenges within India's peer-to-peer lending and alternative investment sectors, especially as fintech companies innovate new product structures around tight regulations. The central question is whether investors fully understand the inherent risks, such as illiquidity and default exposure, when engaging with high-return P2P and real estate products. Historical episodes like the MobiKwik Xtra controversy expose vulnerabilities in marketing practices and risk communication that can lead to significant investor harm.
The Reserve Bank of India's regulatory tightening in 2024 aimed to curb risky practices in P2P lending, emphasizing transparency and investor protection. However, the emergence of products promising outsized returns under new brands risks undermining these goals and may signal regulatory gaps being exploited through novel sales narratives or product designs. For investor confidence and sector stability, ensuring robust disclosures and realistic liquidity expectations remains critical.
What to watch next
Stakeholders should monitor how Transactree Technologies and its associated platforms respond to the current scrutiny, including any regulatory investigations or legal proceedings stemming from investor complaints. The company's ability to demonstrate compliance with RBI rules while managing investor expectations around risk and liquidity will be key factors in rebuilding trust. Additionally, the pace and transparency of its reported growth in lending disbursements and new investor inflows warrant close attention.
Regulators may also intensify oversight on similar fintech entities offering alternative credit and investment products that blur traditional boundaries, to prevent recurrence of past issues. Developments in enforcement and possible amendments to the P2P framework could reshape the sector landscape further. For investors, exercising heightened due diligence and demanding clearer risk disclosures when considering P2P or fractional real estate investments will remain essential.