If there is one major takeaway from the Reserve Bank of India’s (RBI) recent digital lending guidelines, it is that lending is a core financial services business and players involved in it will need some form of licence from the central bank.

For a fledgling fintech lending industry, where more than 75% of participants do not have an NBFC licence, many players must either change their business models or tread the regulated route.

“Around 75% of fintech lenders do not have an NBFC licence, but most of them are working on technology-based solutions to help bring about financial inclusion through easy flow of credit. For them, the guidelines could have a major impact in the short term,” said the founder of a Bengaluru-based digital lending startup and senior member of the Digital Lenders’ Association of India (DLAI). DLAI is an industry body for new-generation lending startups. It has more than 80 members, accounting for 85% of the overall digital lending industry.

But getting regulated is not easy. An NBFC licence is not easy to come by. The RBI has become stricter with these licences and has even come down hard on multiple NBFCs that haven't adhered to regulatory guidelines. Industry estimates suggest as many as 5,000 NBFC licences have been cancelled by the RBI in the last three to four years.

So, new-generation fintech lenders appear to be stuck between a rock and a hard place. On one side, their existing business models are being impacted, and on the other, a regulatory licence might not be easy to get. So, how are these founders dealing with the new regulatory regime?