RBI's new norms require lenders to raise risk weightage for unsecured personal loans by 25 basis points, making lending in this segment costlier.
A recent report by RBI’s CAFRAL had pointed out that lending in the Fintech sector is mostly reliant on personal loans for consumption, making them susceptible to impact from the changed norms.
The higher capital requirement due to the increase in the risk weight may require equity infusions to maintain the book growth in unsecured personal loans.
Experts also predict a decrease in capital lines for lending apps, causing higher interest rates and lower demand for consumer credit.
This may affect the growth trajectory of the Fintech sector and the earlier prediction of Fintech lending surpassing traditional lending by 2030.