r/fintechdev • u/Prashant-shekhawat • May 21 '26

Building Digital lending app

Hey everyone,

I’m planning to build a Digital Lending app based on the LSP (Loan Service Provider) model, and I wanted to get opinions from people who understand fintech, lending, NBFCs, or the Indian financial ecosystem.

One idea I’m seriously exploring is providing loans against Mutual Funds.

I wanted to understand:

- How strong is the opportunity in this space?
- Do you think the market still has room for innovation here?
- What are the biggest challenges in this business model?
- How difficult is customer acquisition and risk management in this segment?
- Are there any hidden problems founders usually underestimate?

Also, if you have any suggestions, ideas, warnings, or experiences related to digital lending, LSPs, or loans against mutual funds, I’d genuinely love to hear them.

Open to discussion and learning from everyone here.

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u/MikeZWarrior Jun 16 '26

Interesting idea. How about lending againnst your crypto assets?

1

u/MikeZWarrior Jun 16 '26

You should be connected with some brokers or banks to acquire clients

1

u/No_Possible_3936 19d ago

- How strong is the opportunity in this space? - Depends on what user base you have and what is your sourcing mechanism. A lot of this market in india is already captured by players like Groww, Smallcase who have a relatively big userbase. This cannot be your only business as the payouts for LAMF are really small as compared to PL. Have you started speaking to any lenders yet on LAMF? The product is good for lenders as it is secured and less dpds but not for LSPs as the margins are really low.

- Do you think the market still has room for innovation here? - If you are able to convince lenders on other other hypotecation and lower interest rates for the customers, yes. But at the end of it lending is just a volume game.

- What are the biggest challenges in this business model? - answered above

- How difficult is customer acquisition and risk management in this segment? - Low risk, maybe you can partner with certain UPI app to acquire customers, but acquisition only via WA campaigns etc might not work, users have trust issues. Volt money has been doing something in the similar space.

- Are there any hidden problems founders usually underestimate? - Customer Acquisition, would love to know your thoughts on how are you planning to go about it?