Over 9000 NBFCs have been serving the financing sector, out of which only 11% have a book size of over 40 crores, reflecting the magnitude of competition among private lenders in this sector. With a majority of NBFCs having a book size of 2 crores, it becomes pivotal for emerging and struggling firms to leverage a collaborative model to sustain in the competitive market. That is where the NBFC collaboration model comes into play.\u00a0<\/p>\n\n\n\n
Through this model, the grappling NBFCs can source leads and funds for lending while empowering Fintech to have access to their expertise and resources- a win-win proposition for either party. The NBFC Collaboration Model is primarily a combination of a struggling NBFC and a Fintech group seeking to withstand competition through new leads and funding while benefitting mutual growth.<\/p>\n\n\n\n
Both Party can give this collaborative endeavor a legal effect via a co-origination scheme agreement. This would allow them to share the profits and even Non-performing Assets.<\/p>\n\n\n\n
Since 2019 large NBFCs have been finding it hard to survive the fierce competition offered by the smaller and mid-size counterparts. As a result, these entities start looking to leverage the expertise of established banks and fintech to gain more leads and funds via a collaborative model.<\/p>\n\n\n\n