What's driving CFOs to exit small-ticket lending startups?

At least three chief financial officers quit digital lending firms between December and March

- Mansi Verma

India's small-ticket digital lending space is facing more than just regulatory pressure—it's seeing an exodus of finance chiefs. Over the past four months, at least three chief financial officers (CFO) have exited fintechs operating in the industry.

The exits come even as several of these firms are still in recovery mode, navigating valuation markdowns, tighter scrutiny from the Reserve Bank of India (RBI), and a shift in investor sentiment away from high-growth, high-risk lending plays.

"Regulatory tightening by the RBI has put added pressure on financial strategy and compliance. Second, the shift from growth to profitability has made the CFO's role more demanding. Third, many boards are pushing for governance resets to restore investor trust," said Rohit Srivastava, senior partner at executive search and advisory firm Longhouse.

The RBI has introduced a series of regulatory tightening measures over the last two to three years. The digital lending guidelines of 2022 mandated greater disclosures and restrictions on first-loss default guarantee models, among other tightening measures.