Fintech startups such as OkCredit, Khatabook, BharatPe and NiYo are applying for a Non-Banking Financial Company (NBFC) licence, people familiar with the developments said, as they look at lending as a key revenue stream. The aim is to maintain their own loan books instead of sharing the profit spread with partners.
If they manage to get an NBFC licence, it will significantly lower cost of capital and quicken the loan disbursal process. However, building credit assessment and collection collection processes, as well as using technology to detect frauds and leakages will be key to scaling up operations, industry observers said. “It is a natural progression for not just fintech companies, but for most tech-based consumer-facing businesses,” said Akash Gehani, cofounder of Instamojo, a financial services startup that caters to MSME vendors and merchants.
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OkCredit, Khatabook, BharatPe and NiYo did not respond to emails seeking comment as of press time on Thursday. Currently most fintech companies that are into the business of lending cross-sell services with a registered bank or NBFC.
Source: Economic Times
