Fintechs shun quick credit as RBI cracks down on unsecured loans
fintech startups that offered short-term credit, primarily to office goers, are either discontinuing or scaling back their offerings as the central bank tightens its norms for short-duration unsecured lending, people aware said.
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Fintech startup Uni Cards, which offered an ‘advance salary’ product named Paychek, recently shut down the product. In a communication to customers, the Accel and Lightspeed Venture Partner-backed firm, attributed this to regulatory changes implemented by the Reserve Bank of India.
Another Bengaluru-based company, Jupiter, also offering an ‘advance salary’ product, is in the process of scaling it down, the sources said. To be sure, an advance salary is typically offered for a month or even less.
“The minimum tenure that NBFCs are offering is around six months, with very few new ones still offering three-month loans,” said one of the people cited above.
While Jupiter has its own lending licence, Uni worked with NBFCs such as DMI Finance and Northern Arc to facilitate these loans. With lenders reducing short-duration offerings, their fintech partners are also discontinuing such products, the sources said.
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