India's retail lending industry must settle conflict of interest

Ironically, lending is the only business where sale or disbursement doesn't result in a profit

Non-banking financial companies (NBFCs) must follow fair, respectful and empathetic practices when ensuring last-mile credit availability, said Finance Minister Nirmala Sitharaman recently. Speaking at the NBFC Symposium 2025 in New Delhi, she encouraged companies to increase their market share to 50 per cent from 25 per cent, but equally directed them to ensure that loans to customers weren’t “pushed”. While her comments were motivating to NBFCs, a moot point remains: How do you ensure loans aren’t pushed when frontline field teams at lending institutions are primarily driven by incentives linked to disbursements? 

The compensation of frontline