The FLDG Model and Fintech-Bank Collaboration in India

Affluence Advisory | Last updated: 05 July 2023

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Fintechs have revolutionised financial services in India, particularly in credit delivery, by using digital data beyond traditional credit scores. Initially, fintechs offered credit scoring models to banks, but to generate more revenue, they developed the First Loss Default Guarantee (FLDG) model. This model allows fintechs to compensate banks for a portion of loan defaults. Following regulatory concerns, the RBI has introduced new, stricter norms for FLDG, limiting guarantees and clarifying responsibilities, which are expected to boost capital flow and responsible lending.

The emergence of Financial Technology providers (fintechs) has revolutionized the way in which financial services are delivered. Fintech firms have leveraged technology to enhance efficiency, convenience, and accessibility. They have been at the forefront of driving innovation in the Indian financial sector. A key area where fintechs have excelled is credit delivery, revolutionizing the customer onboarding and credit disbursement processes with tech-enabled, mobile-friendly platforms that eli

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Why Affluence Advisory for any Tax Compliance services? Affluence Advisory Pvt Ltdis a multi-disciplinary consulting and compliance firm that is managed by a specialized team of Chartered Accountants, Company Secretaries, Corporate Lawyers, and Other Professionals who are committed to providing a quality experience ... Read more

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