Fintech may be the worst hit as RBI comes down hard on unsecured credit

Last week, Mint Road slammed the brakes on the runaway growth in consumer credit. Regulated entities (REs) will now have to review their exposure to the segment, “in particular” to unsecured credit. Top-up loans against assets, “inherently depreciating in nature” (such as vehicles), shall be treated as such. REs need to comply with the diktat no later than the end of February 2024. But what’s gone relatively below the radar is lending by fintech, a good portion of which also falls in the unsecured category. The Centre for Advanced Financial Research and Learning (Cafral) has it that fintech firms have captured a substantial share of the consumer and retail market. Their lending is projected “to exceed traditional bank lending by