RBI’s assault on unsecured lending sends fintechs scrambling

The central bank’s recent order to raise risk weightage for unsecured consumer loans has pushed leading fintech lenders to rethink core business strategies and look for funds.

India’s fledgling digital lending ecosystem is witnessing a reset.

The trigger? In November last year, the central bank ordered all financial institutions to increase risk weights—capital needed to be set aside for loans disbursed—on unsecured personal loans by 25%. 

As a result, top fintech lenders Navi Finserv, Axio and KrazyBee, among others—which built their businesses around swift allocation of small-ticket loans—are staring at an uncertain future. To limit the damage, they are rethinking their strategies, desperately looking for a variety of avenues to raise funds and planning new products in the secured credit market instead. 

Large NBFCs like …


Ashwin Manikandan

Ashwin covered fintech and banking at The Morning Context. Previously, he was at The Economic Times, where he worked across the finance, tech and startup verticals, breaking stories related to India’s banking system, startups in the new economy, digital payments, insurance and cryptocurrencies.