CUSTOMER ALLOCATION FRAMEWORK

    Customer Allocation Framework for RE-LSP arrangements involving multiple lenders:


    This document has been prepared in accordance with the Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025 (formerly Reserve Bank of India’s Digital Lending Directions, 2025) specifically, Chapter III – Digital Lending- Paragraph 7, which pertains to RE–LSP arrangements involving multiple lenders. The purpose of this note is to outline the methodology adopted by the Company in alignment with the aforesaid RBI directives.


    As per the RBI’s directions:


    • The Lending Service Provider (“LSP”) may adopt suitable mechanism to match borrower requests with potential lenders; however, a consistent approach must be followed for similarly placed borrowers and products. Any mechanism adopted, along with subsequent modifications, must be appropriately documented.


    • All content displayed by the LSP must remain objective and unbiased, avoiding any direct or indirect promotion of a particular RE’s product, including the use of dark patterns or deceptive design elements that could mislead borrowers.


    As per regulatory guidelines, Lending Service Provider (LSP) is an agent of a RE (including another RE) who carries out one or more of RE’s digital lending functions, or part thereof, in customer acquisition, services incidental to underwriting and pricing, servicing, monitoring, recovery of specific loan or loan portfolio on behalf of RE in conformity with extant outsourcing guidelines issued by the Reserve Bank.


    I. Customer Allocation Process:

    • Lending Service Provider (“LSP”) leverages a comprehensive and data-driven forecasting methodology to project near accurate monthly loan demand. This approach integrates analysis of historical lending trends, evolving market dynamics, and customer behaviour insights to identify and segment potential borrower groups to match with the underwriting parameters (including the APR as also its components) of each of the LSP. These segments are defined using borrower’s eligibility criteria jointly developed with each lending partner, ensuring targeted and precise alignment with lender requirements.


    • The available credit limit of each lending partner for each segment of the borrower is meticulously assessed in relation to the projected loan demand to maintain prudent credit risk management. This alignment ensures that the loan disbursements are within the risk appetite and capital capacity of the partner, thereby safeguarding the sustainability of the lending ecosystem.


    • LSP employs a dynamic mechanism to efficiently allocate customers to lending partners. This system methodically shows potential borrowers with eligible lenders by evaluating several key criteria, including:

    o The borrower’s eligibility and lenders’ underwriting standards including with reference to the proforma KFS, ensuring alignment with each partner’s specific risk framework for the relevant segment of borrowers.

    o The requested loan amount and tenure, facilitating a precise match between borrower needs and the lending products offered by partners.

    o The real-time available credit limits of lending partners, preventing over-commitment and optimizing capital deployment.

    o Risk-sharing arrangements and product suitability, which are essential to preserving the effectiveness and compliance of partnerships.


    This mechanism is continuously updated to capture current credit capacities and borrower profiles, thereby enabling fair, accurate, and timely customer-to-lender matching.


    II. Lender Allocation Process

    Customer allocation (placement of cards) is governed by an algorithm that prioritizes lending partners according to their risk appetite and available credit capacity, borrower’s requested amount and likelihood of their approval. This logic is consistently applied across all comparable borrowers in a particular segment, ensuring a fair and transparent allocation process.


    III. Empowering Borrowers Through Transparent Choice

    Once the allocation is complete, borrowers are presented with a digital view of all loan offers from matched lending partners that meet their requested loan amount and tenure to enable the borrowers to take an informed decision. This view is designed to be:


    • Comprehensive and unbiased, displaying critical details such as lender name, loan amount, tenor, APR, monthly repayment obligations, and any applicable penal charges.

    • Clear and comparable, enabling borrowers to make informed decisions without any undue influence or promotional bias.

    • Fully compliant with regulatory requirements, including the disclosure of Key Fact Statements (KFS) and the names of unmatched lenders to maintain transparency.


    This approach ensures borrowers maintain complete freedom to select the loan offer that best fits their individual financial requirements.


    Summary

    Lending Service Provider’s customer allocation framework is meticulously designed to balance demand forecasting, lender capacity, and borrower requirements. Through a transparent, consistent, and data-driven whitelist and ranking system, the company ensures that loan offers are matched and presented in a manner that is both equitable to borrowers and aligned with partner capabilities, thereby fostering trust and regulatory compliance.