What is FLDG in Digital Lending?
FLDG means first loss default guarantee. It is a contractual cushion under which a partner covers an agreed first tranche of credit losses on a defined portfolio, structured within the Reserve Bank of India's digital lending framework — not a promise of portfolio yield.
Direct answer
FLDG is loss-sharing on a defined first tranche, documented in the partnership agreement. The NBFC remains lender of record and keeps final approval on every file. On Bharat LMS, any 5% FLDG applies only to files sourced by Seven Fincorp and is subject to the executed agreement.
What FLDG is not
It is not a guaranteed return, not a deposit product, and not a transfer of the NBFC's lending licence. Commission or fee language on marketing pages is indicative until the agreement is signed.
LSP partnership context
Seven Fincorp operates as a Lending Service Provider. Borrower files may be sourced and pre-scored into the LMS; disbursements and repayments route between borrower and NBFC. Regulatory responsibility for lending decisions stays with the NBFC.
What does FLDG mean in digital lending?
FLDG means first loss default guarantee — a contractual arrangement where a partner covers an agreed first tranche of credit losses on a defined portfolio, subject to RBI guidelines and the partnership agreement.
Who bears credit risk in an LSP partnership?
The NBFC bears credit risk as lender of record. Any FLDG only cushions a defined first-loss tranche and does not transfer the lending licence or final approval authority.