Nikhil Kamath wants to lend, Nithin says no: ‘It won’t work in India, we’re a poor country’

What happens when India’s most conservative fintech meets one of its boldest founders? A sharp back-and-forth between Zerodha’s Nithin and Nikhil Kamath reveals deep divisions over lending, risk, and the future of their NBFC ambitions.

In a recent AMA, Nikhil Kamath made the case for expanding credit access—especially for consumer durables—arguing that such lending could fuel broader industrial growth. 

“Access to credit has to go up across the board,” he said, cautioning against rigid thinking. “We don’t need to stick to yesterday so closely that our tomorrow is biased disproportionately.”

Nithin Kamath, however, expressed strong reservations. “Lending is not really in our DNA,” he said. “You lend money and 30–40% don’t pay willingly… then you have to send someone to recover it.” He warned that unsecured lending carries high operational risks, and India’s socioeconomic landscape compounds the problem. “It’s a poor country… beyond the top 3%, you have to charge higher rates. And when you do, defaults rise.”

The exchange grew more pointed when Nikhil suggested defaults would drop as credit scores become more central to the system. “People will be obligated to pay,” he argued. “That’s going to become more the case.” He also questioned why new-age lenders succeeded where banks lagged: “Why did people go to new lenders and not the incumbents?”

Despite the disagreement, both saw potential in secured lending. Nithin pointed to Zerodha’s under-the-radar NBFC arm, which has already disbursed ₹400–450 crore in loans against securities. 

“We have ₹6.5 lakh crore in customer assets… many of these customers are probably borrowing at higher rates than what they could get from us.”

The bottleneck, he said, is regulatory complexity and communication. “As and when we figure that out… hopefully NBFC will be a big, big piece.”

While the philosophical gap between the brothers was on full display, Nikhil stressed that disagreement is part of the firm’s DNA. “The fact that we have room and discourse… that I can tell him what I think is not right, and he can do the same—that’s probably what actually works for us.”