What is NBFC Collaboration?
NBFCs in the Indian echo system have played an integral role in meeting the financial needs of businesses/individuals that have usually remained un-served by the banks segment. However, the regulations for NBFCs have become stringent in recent times. Recently NBFCs are focusing on niche markets and personalized products and services and developing innovative products to catering to urban customers, low-income and unorganized sectors.
NBFC Collaboration is a new business term in which NBFC License holders accept business and operational models backed by technologies that seamlessly facilitate the execution of tailored products and services. Capitalizing in new technologies and strategic partnerships with FinTechs companies and financial institutions allows NBFCs to lower their costs & increasing their customer base by lowering customer acquisition costs, servicing existing customers. This way both parties may or not assume some amount of nonperforming assets risk and share revenue with each other.
New-age NBFCs are using the Fintech model more than ever to increase the lead generation process, streamline underwriting process, credit/loan disbursement mechanism, customer onboarding process and recovery model. Machine learning, Artificial intelligence, and big data have equipped lenders to measure individual customer insights and build alternate credit scoring models. Mobile App and the smartphone version of website penetration have enabled NBFCs to connect with low incomes customers.
NBFC Collaboration with Fintech Company
- Both NBFC Company and Fintech Company will need to sign co-origination scheme agreement
- The Fintech Company will sign an Inter-corporate deposit agreement with a Fund Manager
- A platform service agreement must be signed by the NBFC that allows the payment of technology services by the Fintech Company
- Open Escrow Account - ( a segregate Escrow Account for disbursement and re-payment)
- Appoint a Chartered Accountant for managing funds and operations of Escrow Account
- Keep a close watch over compliance (GST, TDS, CKYC, Credit Reporting, etc.)
- Monthly reconciliation and CIC reporting
- NBFC must follow NPA Provisioning norms of 45/90 days
How NBFC Collaboration Model Functions?
How Enterslice will help you?
If you have any questions or concerns regarding NBFC collaboration model, or looking for tie-ups with NBFC, please send your business profile at info@enterslice.com.
