'BNPL to see short-term impact on credit access'

THE move by lenders to curb supply of small ticket loans will surely result in reducing the pace of penetration into under-served communities, said experts.

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"However, we believe that it will be short-lived as the industry will adjust to the situation by adopting better underwriting practices and growing a sustainable business. The BNPL (buy now pay later) model will see a short-term impact on the access of credit to the underserved communities since a large share of consumers who were first time credit users subscribed to small ticket loans," said Aditya Gupta, Co-founder & CEO, Credilio.

The Reserve Bank of India (RBI) recently advised banks to exercise caution with unsecured loans, as they have grown significantly faster and RBI Governor Shaktikanta Das asked banks and non-banking financial companies to strengthen their internal surveillance mechanisms.