Should #Lending #Fintechs be regulated? Ban Chinese Fintechs!

Such headlines flashed post cases of suicides reportedly instigated by the
collections team of Chinese Lending Fintechs.

We are mixing two issues here - the recovery practices and the investor origin.

Cases around recovery have come up against large private banks & NBFCs in the
past. Most fintechs & even many Banks/NBFCs depend on 3rd party agents to

Follow-up for recovery from defaulters cannot be avoided (in fact its the
lender's right), but going beyond a limit to put pressure is concerning.

Fintech - Indian or Chinese - both face aforesaid challenges.

RBI guidelines recently asked banks/NBFCs to ensure more transparency from their
digital lending partners. It may now

a) ask Banks/NBFCs to even monitor the recovery practices of their partners.

b) consider appointing a SRO - but the industry is too fragmented to be covered.

c) ask Banks/NBFCs to consider the investor antecedents of their partners.

Lets not paint all Lending Fintechs with a single stroke. Responsible financing
requires a learning curve. What say?

A very extensive reporting, Arti Singh. Thank you for including my views.

#fintech #paydayloans #chinese #collections #RBI

Posted by Parijat Garg on LinkedIn