The Reckoning in Digital Lending, Swiggy x Bounce, and WazirX Users’ Approval

In late November 2023, the Reserve Bank of India raised alarms. Risk weights for unsecured personal loans and credit card debt were lifted from 100% to 125%, a clear sign that the easy credit bubble was about to burst. The move was meant to compel banks and NBFCs to hold more capital, designed to cool a consumer loan market that was growing at breakneck speed-while shielding against potential instability. But the decision came with a cost. Disbursements slowed, especially for fintechs that had built their models on instant, unsecured lending. Credit growth fell sharply - from nearly 27% year-on-year during the 2021–23 boom to just 11.6% between September 2023 and March 2025.

Fast forward to 2025, and the headlines are shifting again. The Economic Times reported that fintechs and NBFCs were gearing up for a festive rebound in unsecured lending. Yet, the optimism has been tempered by rising stress. Fintech-driven personal loans now face delinquency rates at a six-quarter high of 3.6%, particularly in Tier-3 towns and among younger borrowers. Reuters, meanwhile, has warned that despite rate cuts, the tightening of unsecured credit is throttling consumption - the very engine the RBI hopes to protect. The amount of money people are borrowing for personal loans isn't growing much, and the amount of overdue credit card debt has almost doubled to ₹33,800 crore by 2025. If ever there was a tug-of-war playing out in one sector, it is here in unsecured credit.

The RBI’s logic was simple: unsecured loans had grown unchecked, and regulators didn’t want India to repeat the mistakes of the West. The move was textbook regulatory play. Cool the system, force a recalibration, and avoid letting a bubble burst after it’s too late. And yet, India doesn’t stay frozen for long. By mid-2025, fintechs like BharatPe and Paytm were not just back in the game but doubling down. Traditional lenders like Poonawalla Fincorp and L&T Finance also began eyeing the festive season as the perfect opportunity to push unsecured lending again.

But this isn’t the free-flowing credit party of 2021 anymore. Fintechs that once prided themselves on instant, no-questions-asked lending now face a different reality. Underwriting has to be sharper, risk calibration tighter, and growth aligned with compliance. Investors are watching this closely too. Now, VCs want to see lower impairment portfolios, deeper partnerships with traditional banks, and businesses that can withstand shocks of regulatory heat.

Globally, there are lessons aplenty. The Buy Now Pay Later (BNPL) frenzy in the US and Europe showed how frictionless credit, when unchecked, could spiral into systemic stress. The RBI seems determined to ensure India doesn’t repeat that cycle. But there is also competitive churn in the market. MSME-focused lenders like Indifi and Aye Finance are beginning to attract attention. Loan Against Property providers are lobbying to be decoupled from the unsecured framework. The broader credit system is in transition - consumption has to revive, but not at the cost of another credit bubble.

Instead of everyone getting easy credit again, the future will be divided. Office workers with steady paychecks will still get loans easily. However, young gig workers and people from smaller towns will likely face stricter loan conditions or higher interest rates. This means fintech companies will have to choose between expanding fast or staying financially strong.

The RBI didn't stop fintech lending, it just made it safer. The industry's recent growth is more controlled and careful. This change shows that fast growth in finance without rules isn't real, and for India, this new discipline is a necessary and timely step.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Humari Bhi Haan Hai”: Over 95% of WazirX users approve restructuring plan in revote

WazirX users have given a big thumbs-up (again) to its restructuring plan, with over 95% in favor this time around.

The approval rate is slightly higher than the last vote, showing continued trust despite the turbulence. Under the revised plan, recoveries will now flow through Zanmai India, which is under the FIU’s watchful eye.

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“Kaddu Katega, Sab Mein Batega”: Swiggy and Bounce partner to boost EV adoption for delivery partners

Swiggy is plugging into the EV wave by teaming up with Bounce to put more electric scooters under its delivery partners.

The rollout starts in Delhi NCR and Bengaluru, with Bounce taking care of deployment, management, and maintenance. Partners can soon access these rides directly through both Swiggy’s and Bounce’s apps.

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“Janmo Ke Saathi”: Astrophel Aerospace signs MoU with IN-SPACe

Pune-based Astrophel Aerospace has inked an MoU with IN-SPACe to work on futuristic space tech. The collaboration will focus on reusable launch vehicles and cryogenic propulsion systems, key for cutting costs and boosting efficiency in space missions.

It’s another sign of how private startups are becoming serious players in India’s space race.

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1. House of Biryan has raised INR 32 Cr to spice up its cloud kitchen expansion, eyeing tier-I cities and new global markets. The startup, already serving biryani in Dubai, now has its sights set on Australia, Japan, the UK, and North America.
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2. Baby care brand R For Rabbit has secured $27 Mn to scale operations, expand distribution, and roll out new product innovations. The round also saw early investor Xponentia Capital exit through a secondary share sale.
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3. PixelSky Capital has marked the first close of its secondary fund at INR 150 Cr, targeting late-stage tech and consumer startups. The fund aims to back companies gearing up for IPOs over the next three to four years.
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4. Smart kitchen brand Beyond Appliances has raised $4 Mn led by Fireside Ventures, with Dharana Capital also backing the round. The funds will fuel two new production facilities within the next year.
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