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Digital lenders struggle to grow profit amid high expenses

Economic TimesEconomic Times · 12d
Digital lenders struggle to grow profit amid high expenses

New-age non-banking finance companies (NBFCs) in India, including Kreditbee and Fibe, reported a drop in net profit for the September quarter due to increased expenses and rising cost of borrowing. Meanwhile, Navi, backed by Sachin Bansal, saw a significant increase in net profit, but faced a business embargo in October. Lendingkart and Kinara Capital also reported losses, while more stable NBFCs like Paisalo and Ugro Capital showed marginal growth in net profit. The tightening of money flow and reluctance of banks to lend to riskier segments have impacted the unsecured credit business. There is a concern that borrowers may resort to informal financing channels as digital lenders alter their customer selection criteria.

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