The rising fintech industry and tech-enabled lending solutions in India has led to a disruption in the lending space, with more and more startups in the sector sprouting and booming. With their rapid penetration, the collaboration of fintechs and traditional sources of finance has been most sought-after and recommended. Last year, Karnataka bank tied up with fintech firm Finwizard Technology to offer wealth management products and other services.
Speaking on similar lines, Alok Mittal, CEO, Indifi Technologies says, “I think the lending ecosystem is evolving and there is a lot of collaboration possible.”
He believes that regarding partnerships with traditional lenders, there are firms which are very collaborative and lending is pretty direct.” However, there is also a category of lenders who want to do the full stack on their balance sheet because they think it helps them optimize the user experience. There is a case to be made for both these styles of lending.
Mittal adds that among new-age players, there’s extensive collaboration, which can be classified under different pieces. “One is within the lending space, for e.g., we collaborate with Lendingkart, who is a lender for our platform as well. The second is more important with respect to how the fintech ecosystem is developing now, for example- if you look at Khosla Labs, they can become a service provider to something like Indifi. From eKYC to e-NACH, there are different pieces to be solved and we are partnering with different players to enable that for us,” he said.
According to Mittal, this is a sub-set of what each firm specialises and helps players focus on what they are good at and let partners take care of the rest.
The idea of collaboration between the old and the new in the financial space is in stark contrast to the formative days of tech-enabled lending solutions or fintech. Many started business after the financial crisis of 2008-09 with the idea of being an alternative to banks, but almost a decade later, both sides are slowly realizing that cooperation makes good business sense. This is even more vital given the credit gap in India stands at over $240 billion.
Saru Tumuluri, CEO, Khosla Labs believes that it is a large addressable market given the country’s huge credit gap for more players to exist. “We have a ringside view of the space and I believe there is space for everyone. We have seen companies that are very specific, for example, targeting healthcare, students’ loans etc., coming up. We believe there is space even within the lending domain for many businesses to come up,” says Tumuluri.