FINTECHS MAY SEE a slowdown in loan disbursals, with the cost of customer acquisition rising as a result of the recent Reserve Bank of India (RBI) norms on consumer loans and bank credit to non-bank lenders. This is because the requirement to maintain higher risk weights for certain loan segments will hamper the ability of their lending partners to provide capital at a low cost, say experts.
"It (RBI norms) is likely to significantly impact digital lenders like Paytm and other fintechs, given bulk of their loans are from NBFCs (non-banking finance companies)," Ranadurjay Talukdar, partner and payments sector leader, EY India, said.
He said some of the increase in cost of capital will be passed on to end borrowers, which might make digital lending products less attractive and push consumers to informal lending channels.
On Friday, RBI asked banks and NBFCs to increase their risk weight on unsecured personal loans to 125% from 100% earlier. Additionally, the central bank directed banks to increase the risk weight on their exposure to NBFCs by 25 percentage points.
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