Central bank bars P2P startups from giving default loss guarantee in tie-ups with NBFCs

The central bank has said peer-to-peer lending platforms cannot offer any default loss guarantee (DLG) to investors, as it furthers scrutiny on the digital lending sector.
The Reserve Bank of India’s directive dated April 26 is likely to impact operations of P2P platforms that relied on affiliates such as Uni, MobiKwik, BharatPe, Rupifi and others to source customers, industry executives said. Some prominent P2P startups with a strong affiliate business are Lendbox, LiquiLoans, Faircent and LendenClub.