Some Indian fintech startups who began their journey as payment or credit marketplaces are now shifting their focus to becoming pure-play lending players in search of that elusive steady revenue stream.
While few have already got a non-banking finance company (NBFC) licence, many players are now applying to get.
Among the new fintech companies applying for an NBFC licence include OkCredit, Khatabook, BharatPe and NiYO, according to an ET report.
Responding to Entrackr‘s query, NiYO co-founder and CEO Vinay Bagri said that the company has applied for NBFC licence. This will help the company in creating innovative co-lending programs with its partners.
However, Khatabook founder Ravish Naresh denied the report as baseless. “We have not applied for an NBFC licence and have no intentions in the short term,” Naresh told Entrackr.
We have also sent queries to OkCredit, and BharatPe but they are yet to respond.
Some of the startups see shifting to pure-lending with technology helping them earn a steady source of revenue. The move will also allow fintech firms, who have partnered with banks to offer loans, to retain the profit.
Currently, several payment players including Razorpay, Instamojo, EnKash, BharatPe and Paytm offer loans in a partner-led model.
In July last year, Entrackr had reported that Razorpay is planning to have a holistic presence in the consumer fintech space via Prepaid Payments Instruments or PPI and an NBFC licence.
However, maintaining compliances is one of the major challenges for many NBFC licence holders. The Reserve Bank of India had revoked licences of 1,701 NBFCs in the year ended March 2019 for failing to meet minimum capital requirements.
Industry observers believe that there is an opportunity to build technology features for repayment of loans.
At the same time, the use of technology to detect leakages and effective credit assessment as well as the collection process will be the key to scaling the lending model, they said.