SWAARIT ADVISORS INTERNATIONAL

NBFC
Collaboration
Presented by SwaritAdvisors
What is NBFC
Collaboration?
The word collaboration refers to the synergy of two or more

entities to bring about the combined results. It is quite a new term

in the lending segment but is gaining popularity rapidly. The

constant growth in the fintech industry worldwide is giving some

realistic goals to the NBFCs to merge themselves with their

technology counterparts. This is what led to the emergence of the

concept of NBFC collaboration.

With around 9000 licensed NBFC in India, less than 1000 of them

are financially sufficient. Rest are in the continuous efforts of

raising funds. For the new cadre of NBFCs with diversified

business plan, they are engaged in the development of

innovative products and creating a niche market for themselves

serving the unorganized segment. Facilitating the planning and

execution of the tailored products requires time and investment.

It is here the concept of collaboration is originated wherein the

strategic partnerships with evolving Fintech segment allows

NBFCs to lower the costs and increase the customer base,

thereby reducing the customer acquisition costs and de-risking

the loan book, servicing a wider part of the economy.

Swarit Advisors enables the NBFCs
and Fintech companies to come
together for this synergy by
providing end to end assistance in
NBFC collaboration focused to go
live within a month.
SWARIT ADVISORS
 Pros and Cons of
ADVANTAGES
Fintech
collaboration

1 3
Rapid Growth owing to fast customer Fulfills the requirement of lacking in-

acquisition with limited resources; house talent and experience;

2 4
Technological advancement; Quick implementation and go live

procedures.
 DISADVANTAGES

DIFFICULTY IN FINDING A SUITABLE SYNERGY

PARTNER

Lower return on investment

DATA SECURITY THREAT AND PRIVACY ISSUES;

Difficulty in cultural integration;

RARE EXCLUSIVITY OF ARRANGEMENTS.

Limitation over brand recognition.

DUE DILIGENCE FOR NBFC
COLLABORATION

FIRST LOAN LEAD BASED CO LENDING

DEFAULT MODEL MODEL

GUARANTEE
Lead Based Model is a FLDG model through Escrow

model where the leads are account is the method

First Loan Default
sourced for which NBFC is adopted by Fintech
Guarantee is the means
required to pay commission companies where 30% loan
through which the lender’s
in the range of 1-3% of loan book is financed by NBFC
interest is protected in
amount. from its fund and the
NBFC.
remaining 70% is financed

by FLDG.
NBFC COLLABORATION FLDG & FUND

BUSINESS MODEL & ITS

Fintech Company is a funder which
FLOW
will provide FLDG & Fund.

FUND MANAGER RETAIL LENDING

The fund is collected by Fund Manager Retail Lending is carried out by NBFC

and is incorporated in NBFC. and revenue share is decided with

Fintech company.
COMPANY 1 (FINTECH COMPANY)
Online as well as offline marketing campaign is deployed by Fintech company

for the leads. Fund Manager is being provided with adequate amount of

deposits and the enabler of it is Fintech company. The funds are infused by

Fund Manager in NBFC which forms Inter Corporate Deposits.

COMPANY 2 (FUND MANAGER)

A fund is managed by a competent person who has good knowledge of law

as well as finance and is CA or Lawyer; basis the instructions received from

Fintech company. The fee is paid by Fintech company to avail the services of

CA or Lawyer.
COMPANY 3 (NBFC)
The activities like loan disbursement as well as underwriting are carried out

by NBFC which is governed by RBI. The list of borrowers of various loan

products is shared by Fintech company and the basis of risk assessment, the

amount is disbursed by NBFC. Some percentage of revenue is kept by NBFC

since risk assessment services as well as loan management services are done

by it whereas the remaining profit goes to Fintech company which was

decided.
BASIC TECHNOLOGY
REQUIREMENTS OF FINTECH
COMPANY

Indian market needs Fintech company to

be mobile app ready

Loan Management system, Collection system

as well as Loan Origination system must be in

its place

Fintech company must own Credit and

underwriting software

Fintech company must know IT security so that

breach of borrower’s information is protected

FINTECH COMPANY AND ITS
COMPLIANCE REQUIREMENT

LOAN OR 100% OF GST ECB

GUARANTEE PAID UP GUIDELINES

GST is levied on Loan processing

CAPITAL as fees which is borne by Fintech

Any loan or guarantee can be company. Fintech company need ECB guidelines must be taken

given by Fintech company but it to worry as processing fee into cognizance by Fintech

should be through board The loan can be availed of 100% comprise GST company especially when debt or

resolution and can go maximum of Paid up capital but this is an loan is raised in form of foreign

up to 60% of its paid-up capital exception and is applicable only fund

and 100% of its free reserves and when members approve it

security premium, whichever is

more.
OUR
PURPOSE
ADOPTING TECHNOLOGICAL
INNOVATIONS
For any concerns related to NBFC collaboration

model/ tie-ups with NBFC, contact us at Swarit

Advisors. We are happy to serve you and solve

your concerns related to NBFC collaboration

model/ tie-ups with NBFC.

Plan a Coffee

+91-9821399320

www.swaritadvisors.com

info@swaritadvisors.com