The RBI approval is what MobiKwik needed to start its lending branch and quickly increase the amount of credit it offers. It lets the financial technology company offer secured and unsecured loans to individuals and MSMEs, with a special emphasis on those in Tier 2 and Tier 3 cities. The company’s stock price went up as much as 15% on April 27th.
MobiKwik Systems Ltd. explained that this approval means a completely owned subsidiary, MobiKwik Financial Services Private Limited, can now handle all its lending under official rules. At 1:35 pm on April 27th, the price of each share was 14.7% higher, at 231.7.
What the NBFC licence enables
MobiKwik says the NBFC structure will allow it to create and offer credit products more quickly. This will be supported by their existing technology, their system for deciding who gets loans, and their method of collecting payments. The company intends to broaden what it offers in both secured and unsecured loans to meet a wide variety of borrowing needs.
This new branch, MobiKwik Financial Services Private Limited, will also allow MobiKwik to work with other lenders in “co-lending” arrangements. According to MobiKwik, this will help more people and MSMEs get the money they need and will extend MobiKwik’s reach.
The company outlined the immediate priorities:
– Launch wholly owned NBFC subsidiary, MFSPL
– Expand secured and unsecured lending across segments
– Target Tier 2 and Tier 3 cities
– Enable co-lending partnerships with lenders
– Speed product launches using existing technology
Regulatory steps and rollout
MFSPL (MobiKwik Financial Services Private Limited) can’t begin operating until the RBI actually issues a Certificate of Registration and all the requirements are fulfilled. The company states this new setup fits with their aim of making a complete financial technology platform, combining payment and lending services.
An NBFC framework will also help MobiKwik create partnerships in co-lending situations. This is expected to increase how widely available services are and to make getting credit easier under official oversight.
Leadership view and strategy
Upasana Taku, who is MobiKwik’s Executive Director, Co-founder and CFO, said getting this approval is a very important step in the Group becoming a large financial services provider. She said the RBI approved their application in under four months and thanked the RBI for trusting them.
Taku said this gives them the official structure they need to make their credit options more complete while still being careful and managing risks. She added they’ll continue to carefully fulfill the borrowing needs of people across India and build products that really help more people to be financially included.
MobiKwik says the NBFC structure will allow them to use their technology, artificial intelligence and machine learning, and their large number of users to give people financial products that are customized for them. They’re planning to serve a wider variety of customers and businesses with more efficiency and more control.
Reach, products, and inclusion focus
MobiKwik currently has over 186 million registered users and almost 4.8 million businesses on their platform. They offer a digital wallet, UPI payments, credit options like ZIP EMI (a type of installment plan), and investment products.
The NBFC will mainly be aimed at customers in Tier 2 and Tier 3 cities, while continuing to provide services throughout the country. This plan is to make getting formal credit more available in areas that are currently underserved.
Why it matters for credit access
By working with an NBFC license, MobiKwik intends to increase responsible lending while maintaining good management and risk controls. The company says that working with other lenders and launching products faster will help them reach more individuals and MSMEs, particularly in areas outside the major cities.
MobiKwik views the approval as a major achievement in making their financial services better. They say it makes them stronger as a technology-driven platform that puts payments and lending together in one place.
