Did you know that rising loan delinquency rates can lead to significant opportunity costs and damage the reputation of Microfinance Institutions (MFIs)? According to a recent Business Standard report, non-banking financial companies (NBFCs) focusing on microfinance may face higher credit costs due to increasing loan delinquencies. In addition, the asset growth of these companies is […]
4 Ways Co-lending Can Strengthen the Indian MSME System
Did you know there are around 64 million micro, small, and medium enterprises (MSMEs) in India? Additionally, MSMEs contribute around 30% of the total GDP and account for 31% of the country’s workforce, highlighting their indispensable role in India’s economic growth in recent years. Yet, MSME credit penetration in India is only 14%, which begs […]
10 Ways Peer-to-Peer Lending is Challenging RBI’s Traditional Lending Regulations
Peer-to-peer lending (P2P lending) is disrupting the traditional financial framework, but not without raising concerns about regulatory oversight and borrower-lender protections. Unlike regulated banks, which must adhere to the strict RBI guidelines for documentation, credit assessment, and compliance, P2P platforms often operate with minimal requirements. While seemingly beneficial for quick access to funds, this relaxed […]
What is the India Fintech Stack: A Guide to Seamless Digital Lending for NBFCs
Did you know that Non-Banking Financial Companies (NBFCs) can leverage data and digitisation to facilitate lending? It can lead to reduced costs, faster approvals, and increased financial inclusion. According to BCG, this might enable a 15X growth in this market, reaching INR 7 lakh crore in annual disbursements. But what drives this growth? It is […]
Proactive Credit Risk Management: Developing an Early Warning System
As per a report, as of March 31, 2023, 2,623 borrowers were classified as wilful defaulters in India and owed Rs 1,96,049 crore to the banks in India. This highlights the inherent risks lenders face. Therefore, financial institutions (FIs) need robust credit risk management to minimise risk and boost returns and productivity. An early warning […]
Is Your Loan Management System Meeting Regulatory Compliance Standards?
The rapid advances in fintechs and their adoption have led regulatory bodies such as the Reserve Bank of India (RBI) to scrutinise the digital lending guidelines closely to limit compliance breaches. For example, In October 2024, four Non-Banking Financial Companies (NBFCs) were barred from sanctioning and disbursing loans due to regulatory violations. Also, earlier this […]