Cashfree Payments, an India-based payments and API banking system, has announced a disbursement and collections loan solution for NBFCs and LSPs.
Non-banking financial companies (NBFCs) and their lending service providers (LSPs) would be able to comply with new digital lending rules thanks to the solution. Cashfree Payments will offer both digital lending and co-lending use cases with this solution.
The Reserve Bank of India has mandated that all fund-flows related to loan disbursement and repayment take happen directly between the lender’s and borrower’s bank accounts, with no pass-through or pool account of any third party.
The solution provided by Cashfree Payments facilitates borrower identity and bank account verification, the construction of lender escrows, seamless loan disbursements direct to borrowers, the management of various LSP relationships, and fast reconciliation. Repayments via e-NACH and UPI AutoPay are also permitted in accordance with the standards.
According to Cashfree Payments officials, the digital lending and co-lending industries in India have seen tremendous growth due to the country’s high fintech adoption. Because of this widespread use, there is a growing demand for compliant and scalable solutions for loan disbursements, loan repayment, and KYC verification.
Cashfree Payments released Issuance, an API banking service, in October 2022 to enable businesses to issue prepaid cards and wallets.
Issuance is an API stack for issuing prepaid cards and wallets that can be used for payroll and incentive disbursals, customer loyalty programmes, and cost management. The system also enables fintechs and platforms to develop co-branded and mono-branded prepaid cards, both physical and virtual, as well as wallets for their customers, partners, and employees.
According to Cashfree Payments executives, the debut of the Issuance solution complements the company’s aim to quicken payments in India.