First Loss Default Guarantee (FLDG) Services in India - Strengthen Your Lending Portfolio with FinAxis.

We help NBFCs and fintechs design robust FLDG structures that reduce default risk, enhance investor confidence, and enable responsible credit growth.
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The First Loss Default Guarantee (FLDG) is a structured risk-sharing mechanism widely used in India’s fintech and NBFC ecosystem. It allows a third party - typically a fintech partner or guarantor - to cover a predetermined portion of loan defaults, reducing exposure for lenders and encouraging greater credit access.

Key Features of FLDG:
  • Risk Mitigation: FLDG provides a safety net for lenders and investors by limiting their exposure to potential losses.
  • Third-Party Involvement: A guarantor or insurer assumes responsibility for covering losses up to a specified limit.
  • Defined Coverage: The guarantee typically covers a predetermined percentage of the total loan or investment amount.
  • Encourages Lending: Enables lenders to extend credit to new or underserved segments.

FLDG Advisory & Support Services We Offer

Risk Mitigation

Risk mitigation involves strategies and techniques to minimize potential losses in investment portfolios. This includes diversification, hedging, and the use of financial instruments to protect against adverse market movements.

Regulatory Framework

Transparency in financial markets refers to the extent to which investors have access to relevant information about financial products and services. This includes clear disclosure of fees, risks, and performance data, enabling investors to make informed decisions.

Transparency

Transparency in financial markets refers to the extent to which investors have access to relevant information about financial products and services. This includes clear disclosure of fees, risks, and performance data, enabling investors to make informed decisions.

Credit Enhancement

Credit enhancement refers to various strategies and techniques used to improve the creditworthiness of a borrower or a financial instrument. This can include the use of guarantees, insurance, or other forms of credit support to reduce the risk of default and make it easier for borrowers to access financing.

How FLDG (First Loss Default Guarantee) Works

Initial Consultation

Understand your lending structure, risk appetite, and investor requirements.

Documentation Collection

We assist in collecting borrower and partner data required for portfolio analysis.

Application Submission

Submit your FLDG partnership proposal for legal and compliance review.

Approval Process

Our team helps finalize the agreement and define the guarantee coverage percentage.

Funds Disbursement

Guarantee funds or reserve amounts are allocated as per the FLDG agreement.

Ongoing Support

Continuous review of portfolio performance and risk-reduction strategies.

Need FLDG for Your NBFC or Fintech?

Get compliant, risk-balanced FLDG structuring that strengthens your lending operations and investor confidence.

Discuss FLDG with Us

Have Questions?

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