Even as Singapore has just began a series of roundtable talks with India in new areas of trade and cooperation in Fintech, already the signs are out there of the route being fraught with traps and dangers.
In this recent regulation by the Reserve Bank of India (RBI), it is stopping fintech companies from providing credit to merchants either through partnerships with NFBC (Non-Financial Banking Companies) or the fintechs’ own NFBC.
This recent measure is a dampener for most fintechs since they will now lose the revenue generating opportunity of this business model. This business model allows the fintechs to offer credit lines to merchants without the usual need of stringent credit assessment required by banks. It also means that banks may stand to lose out on earning interest by lending monies or giving credit to the same merchants.
Read the original article from TechCrunch India here to find out more.
A golden rule to follow: if you think that the risks cannot be mitigated in that business environment, do not enter it.
If you have some comments on this article, do leave it in the Comments box below.