NBFCs and Fintech – Restructuring the Indian credit industry


Introduction of Artificial Intelligence (“AI”) and robotic process automation are providing spectacular customer services to borrowers. A research was conducted by Accenture on impact of AI on profitability. It was found that AI has the potential to boost rates of profitability by an average of 38 percent by 2035 across 16 industries. Fintech companies are well-equipped in providing the said infrastructure.

While, NBFCs are at the forefront of the financing in the para-banking sector. With each passing year, they are penetrating deep into the Indian society in order to extend their financial services.

During the 8th Associated Chambers of Commerce and Industry of India, National E-Summit on the NBFC sector held in 2021, Ketan Doshi, managing director of PayPoint India said, “NBFCs are going to be the forefront of the credit outreach which is required in the country, and this can happen with the partnership model with Fintech. It can bring credit revolution in the country.”

Following are the contributions of the two components:

  1. Contribution of fintech in collaboration:
    • Chatbots,
    • 24*7 assistance,
    • automated system for e-KYC undertakes the repetitive and mundane task of customer acquisition.
    • This results in channelising the work force into strategising and taking up human-interaction based services.
  2. Contribution of NBFCs in the collaboration:
    • NBFCs have surmounted the key defects of the traditional banking system.
    • They are providing speedy and flexible lending solutions to people and companies.
    • Borrowers can avail services irrespective of their credit scores.
    • Additionally, imposition of relatively lenient regulatory compliances also pans out in their favour.

The fintech companies provide technological infrastructure to the brick-and-mortar NBFCs. It facilitates the process of customer acquisition, risk management, analysis of the lending process and other logistical functions.  For example: – fintech companies and NBFCs are coming up with co-lending and peer-to-peer lending services.


NBFCs majorly taps on the market that the traditional banking system tends to marginalise. In such a scenario, collaboration with tech-based companies can accelerate reachability and generate large sources of revenue. Additionally, with the effects of the pandemic phasing out demand for credit is at its peak. This collaboration between NBFCs and fintech companies can prove to be valuable to the economy.


The content of this article is intended to provide general guidance on the subject matter. Specialist advice should be sought about your specific circumstances.

Key Words: NBFCs, Fintech, Collaboration, Para-banking, AI, Banks, Borrowers, Lending, Businesses.

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