Fintechs offer secured lending with instant loans against mutual funds

With refined technology stacks, fintechs are venturing into secured lending such as loans against mutual funds, after cutting their teeth on gold and property-backed credit.

- AJINKYA KAWALE

The latest product on the block for fintechs is a loan against mutual funds (LAMF), enabled by the fully digital nature of securities in the country. Companies are relying on technology stacks built in-house to enable such credit transactions on a real-time basis, which a few years ago would have taken weeks.

Users can pledge their mutual funds as collateral to get instant credit even as they continue to stay invested via SIPs (systemic investment plans).

"The technology innovation, which happened in the last one year, has allowed these products to happen on a real-time basis. Right from origination to the disbursement, it doesn't take more than a minute, which used to take a couple of weeks maybe five years back," said Akshay Mehrotra, co-founder and chief executive officer (CEO), Fibe, a digital lending firm.