Brace for impact people in lending biz!!!
After the recent RBI mandate to banks and NBFCs against unsecured personal loans, the lenders have pulled back their hands from digital lending. My company has already started facing the impact. Tomorrow onwards we won't be able to disburse any new loans from our platform because the lender is unsure of the road ahead.
Personally, I can't afford to go through another layoff this year :')
Okay . Stop reading from headlines. RBI ,just like it does with monetary policy, has pulled some strings, which is going to make the unsecured lending difficult for banks. They now have to deposit more amount to the rbi than earlier to give away the loan. Loans are unsecured for customers, but in the treasury, they are backed up by cash. RBI doesn't flat out ban things. (Other than cur notes ;-) ). These are ratios, i am not gonna right here because you should have known ,its your job. Don't be the reason ppl think PM role is unnecessary.
Stop spreading fud , do you even know how much impact it would have. Rbi has just increased the % , if a user which was getting the loan at 9% , now they ll get it at 9.50%. And the company you are telling doesn’t have just one lender
Yes exactly. Hike in interest rate -> drop in number of people who sign up for loans. Though right now there's no clarity on by how much will each lender hike the interest rates
In Personal loans, interest rate doesn't have much sensitivity. Amounts and tenures are less so cost doesn't increase as much as we think.
People who are sensitive to rates usually don't borrow from NBFC's. Others who are completely insensitive are your target segment.
Nah. RBI changing rules is quite common.. does it all the time and fintechs have to keep adapting..
This time the mandate is directly against the number of loans that are being disbursed. Hence, lending biz is affected
This is not the first time rbi is abruptly changing rules. Most nbfc will make "adjustment". Window dressing is very common.
The impact on fintechs is hugely overblown IMHO. RBI action will increase the rates by a few bps. This segment has very high NIMs and most fintechs have a target group for whom 0.5% higher ROI won't make too much of an impact - it's not that these borrowers have a myriad of options. As with all RBI circular, this will cause some initial panic knee jerk reactions which will settle in less than a month's time.
They changed the unsecured loan ratio from 100 to 125 % so if a bank is lending 100bucks as unsecured , 125 would be counted as capital at risk and based on liquid ratio a percentage of this amount would sit in rbi lockers.. read finshot has agreat ecplainer how nbfc n other will be impacted
Yeah I linked its article somewhere in the comments section
Gosh.
& share tanks 18%
I think this circular is indicative of the end of any new startups thinking of building businesses off of unsecured credit products. Firms like PayTM, OneCard, CRED have already built a large distribution/presence. NBFCs will continue partnering with them. New players who do not have such a big reach will struggle to partner with reputed NBFCs/Lenders and their business will suffer.
No wonder most new-age lending fintechs are moving into the supply chain/B2B finance space. Loads of possible innovation is possible here with OCEN. However, as per my knowledge most small sole proprietors/micro enterprises used to depend on personal loans to fund their businesses. These small firms do not have their own credit score and the proprietors personal credit score used to be used to underwrite personal loans instead. So unsure how this will be solved.