RBI’s liquidity handouts are a mirage for fintech
The central bank’s big initiatives meant to deliver cheap credit to lenders in a crisis—but fintech NBFCs have seen little of it.
Arti Singh
13 August 2020

The COVID-19 pandemic has not been kind to companies in the business of lending.

It has been especially hard on non-bank lenders, including fledgling fintech startups. The economic fallout of the pandemic and subsequent lockdowns and restrictions across India have seen credit demand dry up, meaning fewer new loans; at the same time, many a customer took the central bank’s offer of delaying their loan repayments, meaning interest income goes down for lenders.

They also found themselves in a liquidity crunch, and to top it all off, fintech lenders and other non-banking financial companies, or NBFCs in banking parlance, were themselves on the hook for repaying their own debt to banks. (We’ve written about the current plight of fintech lending earlier.)

Amid all this, the Reserve Bank of India came swinging in with a slew of schemes to issue funds to lenders of all hues, including NBFCs.

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