The Lending Landscape: Fintech–NBFC Collaboration in Context
India’s fintech lending ecosystem is evolving rapidly — from partnerships with regulated non-banking financial companies (NBFCs) to independent, technology-led lending platforms. Both models have propelled credit access to millions of underserved consumers and MSMEs. According to the RBI’s Financial Stability Report (2025), NBFCs accounted for nearly 24% of total lending flows in India, much of it through fintech collaboration channels.
For fintechs, the choice between partnering with NBFCs or building an independent lending stack determines their regulatory obligations, risk appetite, and capital structure. The NBFC route provides instant legitimacy and compliance coverage, while independent models promise agility and full control — but with higher scrutiny.
As digital lending volumes rise 30% year-on-year (PwC India, 2026), fintech founders face a key strategic question: “Should we co-lend or go solo?” The answer depends on your funding source, risk model, and user segment. Fintech Co Lending Architecture explores this in detail.
Insight: In India, fintechs borrow trust from NBFCs and NBFCs borrow innovation from fintechs — the collaboration defines modern credit delivery.Globally too, hybrid lending has become mainstream. The Bank for International Settlements (BIS) noted in 2026 that 47% of fintech lenders globally now operate under shared-regulation partnerships — proving that collaboration and compliance can coexist.
How NBFC Partnerships Work: Shared Risk, Scale & Compliance
NBFC partnerships are the backbone of India’s digital lending expansion. In this model, fintechs handle user acquisition, credit scoring, and technology, while NBFCs provide regulated balance sheets, capital, and compliance oversight. This symbiotic structure ensures both innovation and accountability.
Fintechs leveraging Rbi Digital Lending Framework operate under RBI-approved norms for data storage, customer disclosure, and grievance redressal. NBFCs remain the legal lender of record, disbursing funds and reporting to credit bureaus. Fintechs act as Loan Service Providers (LSPs), earning commissions or revenue-share fees.
Examples include collaborations such as KreditBee–KrazyBee NBFC, Fibe–InCred, and PayU–IDFC FIRST Bank. These partnerships allow fintechs to scale fast without setting up capital-intensive lending entities. According to the Digital Fifth LendingTech Report (2025), co-lending transactions in India crossed ₹1.8 lakh crore, growing 38% YoY.
The key benefit: compliance assurance. NBFC partners already follow capital adequacy norms, RBI audit cycles, and exposure caps. This gives fintechs operational freedom while staying regulatory-safe. However, fintechs remain accountable for front-end user experience, grievance handling, and data security.
Tip: Fintech–NBFC partnerships thrive on transparency — always define data rights, revenue share, and borrower communication responsibilities upfront.In summary, NBFC alliances are ideal for early-stage fintechs seeking quick market entry and compliance coverage. But as platforms mature, the need for independent lending autonomy increases.
Independent Lending Models: Autonomy with Accountability
Independent fintech lending models represent the next evolutionary step — where fintechs hold lending licenses, raise capital, and manage risk directly. This route demands significant investment but provides full ownership of customer relationships and credit strategy.
Fintechs adopting this model often evolve from LSPs to licensed NBFCs. Slice, for example, transitioned from a pure-card fintech to a regulated NBFC in 2025, enabling it to lend directly while designing its own underwriting stack. Similarly, Navi Finserv and Lendingkart operate as independent entities, managing end-to-end credit lifecycles using AI and data analytics.
Independent models rely on proprietary scoring engines — often integrating alternate data such as digital payments, social transactions, or employment patterns. Through Fintech Credit Risk Algorithms, lenders optimize real-time decisions using AI and machine learning. According to IMF Digital Finance Review 2026, such models reduce processing time by up to 60% and boost approval accuracy by 35%.
The trade-off? Higher regulatory compliance costs and balance-sheet exposure. RBI requires independent lenders to maintain minimum net-owned funds, adhere to provisioning norms, and undergo quarterly audits. Moreover, consumer protection laws under the Digital Personal Data Protection Act (2025) impose strict data-handling obligations.
Independent models are sustainable for fintechs with strong capital backing, risk expertise, and steady borrower bases. They allow flexible pricing, niche product design, and deeper customer loyalty — but demand institutional maturity to manage systemic risk.
Finding the Balance: What India’s Fintechs Can Learn
India’s fintech lending evolution isn’t a binary between partnership and independence — it’s a continuum. Many successful players now adopt hybrid paths, co-lending initially and transitioning into regulated independence once their risk models mature.
Choosing between models depends on three pillars: Capital Readiness, Regulatory Readiness, and Customer Ownership. Fintechs seeking speed and low entry barriers often partner with NBFCs. Those aiming for full-stack control eventually pursue their own licenses.
RBI’s 2026 supervision roadmap encourages such evolution under controlled frameworks. Fintechs adopting Lending Compliance Best Practices — transparency, AI auditability, and consumer consent — are better positioned for longevity.
Globally, BIS data suggests 61% of fintechs shifting from partnership to licensed operations within 5–7 years. The message is clear: partnerships launch innovation, independence sustains it.
The future of fintech lending in India isn’t about rivalry — it’s about responsible coexistence of innovation and regulation.
Frequently Asked Questions
1. What is the difference between fintech–NBFC partnerships and independent lending?
Partnerships rely on NBFCs for capital and compliance, while independent models lend directly as licensed NBFCs, managing full risk and regulation.
2. Why do most fintechs start with NBFC partnerships?
Partnerships offer faster market entry, lower capital requirements, and shared compliance responsibility with established NBFCs.
3. What are the challenges of independent lending models?
They require higher capital, RBI licensing, regulatory audits, and expertise in credit risk management and compliance.
4. Can fintechs transition from partnership to independent models?
Yes. Many mature fintechs evolve into licensed lenders after stabilizing risk systems and securing investor support.
5. Which model is better for India’s fintech growth?
Both matter — partnerships drive inclusion, while independent models enable sustainable, regulated innovation.