One MobiKwik Systems has announced that it has received approval from the Reserve Bank of India (RBI) for a non-banking financial company (NBFC) license. This significant development allows the fintech firm to establish a lending arm named Mobikwik Financial Services.
The new license will enable MobiKwik to broaden its regulated credit offerings, focusing on consumers and small businesses, particularly in underserved markets. Following the announcement, the company's shares surged by 14%.
Key Benefits of the NBFC License:
- Launch of Mobikwik Financial Services to provide lending products.
- Ability to offer both secured and unsecured loans.
- Faster rollout of lending products and improved profit margins by managing credit operations in-house.
As part of its strategy, MobiKwik aims to enhance its digital wallet services and expand into the distribution of financial products, including credit and investments. The company has indicated that it will commence its non-bank lending operations once it obtains a certificate of registration from the RBI, contingent on meeting specific conditions.
Why This Matters: This move positions MobiKwik to better serve the credit needs of underserved markets, potentially increasing financial inclusion.
Next Steps: Stakeholders will be watching closely as MobiKwik prepares to launch its lending operations, which could reshape its business model and market presence.
