Indian fintech outfit MobiKwik has announced that it is investing Rs 9.99 crore into its Non-Banking Financial Company (NBFC), MobiKwik Financial Services Private Limited (MFSPL), as per a regulatory filing dated October 1.
The company will be infusing this amount in cash into MFSPL in one or more tranches by October 10.
MobiKwik disclosed to both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) that its NBFC unit is primarily tasked with “all types of leasing and hire purchase business.”
For context, this business pertains to leasing and purchasing machinery, plants, equipment, ships, vehicles, aircraft, rolling stock, factories, and other movable and immovable property.
However, it is notable that there is no indication of whether MFSPL has acquired an NBFC license from the Reserve Bank of India (RBI), the country’s apex banking authority — to conduct its operations.
MobiKwik set up MFSPL on April 23 this year, with a paid-up capital of Rs 1 lakh. However, the fintech firm did not apply for an NBFC license at that time. As of now, there remains no clarity regarding the license status of MFSPL.
MobiKwik’s Financial Services Revenue: The State of Play
It is pertinent to note that MobiKwik’s financial services revenue declined to Rs 58.31 crore in Q1FY26 from Rs 170.73 crore in Q1FY25 — marking a 65.8% year-on-year (YoY) fall.
This decline is largely due to the company pausing its short-term loan offerings under the buy-now-pay-later (BNPL) service ZIP in Q4FY25, citing lower lender appetite — which led to a steep drop in lending revenue.
MobiKwik also reported a sharp fall in the number of merchants accepting its BNPL service, dropping to just 22 in Q4FY25 from 2,054 in Q3FY25.
The company is now focusing on longer-term loans through its other lending service, ZIP EMI. The take rate for this segment stood at 8.41% in Q1FY26, compared to 7.28% in Q1FY25.
MobiKwik’s Chief Financial Officer (CFO), Komal Sharan, explained that the company is operating under a first-loss default guarantee (FLDG) model, and such loans will continue since the company had factored Default Loss Guarantee (DLG) into its IPO (Initial Public Offering) proceeds.
To explain, FLDG is a lending model where third parties, such as fintech companies, compensate lenders if a borrower defaults on his or her loan. Notably, MobiKwik offers lending partners a 5% share as FLDG.
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Sharan further elaborated that regardless of the loan model, the credit profile and the return the company earns on the loan remain the same. However, the major change lies in the cost linked to the loan, which gets eliminated upfront.
Why This Matters
As illustrated by the financial metrics above, MobiKwik has witnessed a significant downturn in its financial services revenue recently. The investment into its NBFC unit appears to be a damage-control move.
Previously, the fintech company conducted…
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