India's Credit Boom: Unregulated Loan Intermediaries Demand Urgent Oversight
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CNBC TV18•09-01-2026, 10:46
India's Credit Boom: Unregulated Loan Intermediaries Demand Urgent Oversight
- •India's credit ecosystem has rapidly expanded, with loan intermediaries (DSAs) driving 30-45% of originations, but operating without formal regulation.
- •Unregulated intermediation accounts for annual disbursements of 15-20 lakh crore rupees, generating 15,000-30,000 crore rupees in commissions.
- •These intermediary costs are embedded in borrower credit, significantly impacting MSMEs' working capital and long-term credit dependence.
- •Unlike other financial sectors (mutual funds, insurance, digital lending), loan intermediaries lack professional certification, fee discipline, and a market-wide governance framework.
- •The article advocates for mandatory certification, reasonable payout bands, and an RBI-recognized self-regulatory organization to professionalize and ensure accountability.
Why It Matters: Formal regulation for loan intermediaries is crucial to strengthen India's credit system and protect borrowers.
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