Deep pockets can’t have same effect in NBFC as startup like Flipkart. You have to ensure the money lent is returned. Else you will end up disbursing 10 billion $ in a year and 20% NPA. Even players with experience of years can struggle a lot. I’ll give two examples.
- Bandhan Bank had decade of experience in MFI. They became bank and first corporate lending they did was ILFS.
- Motilal Oswal had decades of experience in financial markets. One of the promoters Ramdev is renowned investor too. Still Aspire housing finance just grew loan book and didn’t pay much attention to risk. Today Aspire is saddled with 15% NPA and more is coming.
Of all the startup disruptions in world, nobody has cracked and proven record in Banking. Payments have been disrupted. Even asset management is disrupted by likes of Alipay and Robo advisories. Banking is tougher nut to crack and a disruptor has to stay afloat for few years to prove anything (there are few startup tech-only banks in UK and Europe who are successful so far. But they have years to prove it).