TL;DR
A Head of Lending owns a loan book: its growth, its pricing, its product set, its channels and, depending on how the organisation is structured, some or all of its credit policy. In a digital lender this is the central commercial seat, because the loan book is the business rather than a product line within it.
The structural tension in the role is that it owns growth and credit quality at the same time, and those pull against each other every day. How an organisation resolves that tension, specifically whether credit policy sits with lending or with an independent risk function, is the most important thing to settle before the search, because it determines which candidates are appropriate and what the role is actually worth.
Key points
- Decide where credit policy sits before writing the brief. With lending, with risk, or jointly, and each produces a different role.
- Above ₹5,000 crore in assets the RBI requires an independent Chief Risk Officer who cannot carry business targets, which caps how much policy authority this seat can hold.
- Digital lending is growing fast on a tightening rulebook, which makes regulatory fluency a commercial skill rather than a compliance one.
- The best diagnostic is a book the candidate has watched deteriorate, not one they have grown.
What the role owns
The book. Origination volume, mix across products and channels, yield, and the growth trajectory the board expects.
Product. Personal loans, consumer durable finance, business and SME lending, loan against property, supply chain, embedded credit, each with different economics, different regulatory treatment and different operational demands.
Pricing. Interest rates, processing fees and the all-inclusive annual percentage rate that must now appear in the Key Facts Statement. Pricing is bounded by competition at one end and credit cost at the other, and the Head of Lending usually owns the trade.
Channels and partnerships. Direct digital, lending service providers, embedded and platform partnerships, direct selling agents, co-lending arrangements. Each channel has a different acquisition cost and, importantly, a different credit profile, which is where channel strategy becomes a risk decision.
Credit policy, in whole or in part. Eligibility criteria, cut-offs, documentation, exposure limits. In most organisations this is shared with risk, and the boundary needs to be explicit.
Collections, sometimes. Organisations split on this. Where collections sits with lending, the seat owns the full credit lifecycle and has the right incentives. Where it sits with risk or operations, the Head of Lending owns origination without owning the consequence, which is a structure worth examining.
Unit economics. Contribution per loan after acquisition cost, cost to serve, cost of funds and credit cost. The candidates worth hiring think in these terms rather than in disbursement volume.
The credit policy question
This is the decision that defines the role, and the common structures are genuinely different jobs.
| Structure | How it works | When it suits |
|---|---|---|
| Policy with lending | The Head of Lending sets policy within board-approved guardrails; risk monitors and challenges | Early-stage lenders needing speed, where the board can see the book directly |
| Policy with risk | Risk sets policy; lending operates within it and argues for change through a governed process | Scaled and regulated lenders, and the structure the RBI's framework pushes toward |
| Joint, with a credit committee | Policy changes require agreement; the committee decides and records | Most workable at mid-scale, provided the committee actually meets and decides |
Two constraints shape this. The RBI requires NBFCs above ₹5,000 crore in assets to appoint a Chief Risk Officer who holds no other responsibility, carries no business targets and does not report into a business line. That places a ceiling on how much policy authority can sit with lending in a scaled entity, whatever the organisation chart says.
And the incentive logic is plain: a leader paid on disbursement who also sets the cut-off has a conflict that will eventually be resolved in favour of volume, usually a cycle later and usually visibly.
Our advice when asked is to be explicit about which structure you are running, write it into the brief, and pay the role accordingly. Candidates ask, and a vague answer loses the good ones because they read it as an unresolved internal argument they will be caught in.
The regulatory frame has tightened
Three changes in the last eighteen months bear directly on this seat.
The RBI (Digital Lending) Directions, 2025, notified 8 May 2025, consolidated the earlier regime. The provisions that constrain this role are the requirement that disbursal and repayment flow directly between borrower and regulated entity, the 5% cap on default loss guarantee with invocation within 120 days, the Key Facts Statement discipline on the all-inclusive annual percentage rate, and the obligation from 1 November 2025 for lending service providers with multiple lenders to display all matching offers without dark patterns.
That last one matters commercially and is often missed. If your distribution runs through a multi-lender platform, you are now displayed alongside competitors on a comparison the platform must present neutrally. Channel strategies built on preferential placement no longer work as they did.
The Co-Lending Arrangements Directions, 2025, effective 1 January 2026, extended co-lending beyond priority sector to all loan types, with each participant retaining at least 10% of every loan, a 5% cap on default loss guarantee, escrow requirements and a blended rate disclosed through the Key Facts Statement. This widened the opportunity and tightened the structure simultaneously.
Enforcement is visible. The RBI cancelled 150 NBFC certificates of registration through orders dated between 6 and 21 April 2026 under section 45-IA(6) of the RBI Act, announced by press release on 14 May 2026. These were compulsory cancellations; a separate seven NBFCs surrendered their certificates voluntarily. The direction of supervisory attention is not in question.
The practical consequence for hiring is that regulatory fluency has become a commercial competence in this seat rather than something delegable to compliance. A Head of Lending who cannot reason about what a rule change does to the channel economics will be planning against a market that no longer exists.
Which backgrounds transfer
| Background | Transfers | Watch for |
|---|---|---|
| Lending leadership at a digital lender or fintech NBFC | Strongly. The closest match | Small pool, employed, long approach cycles |
| Retail lending leadership at a bank or large NBFC | Well | Deep credit instinct and governance; assess comfort with algorithmic underwriting and fintech pace |
| Credit risk leadership moving to the business side | Situationally | Strong on quality, must be tested on growth appetite and channel economics |
| Product leadership in lending | Partially | Knows the proposition; credit judgement and P&L ownership are the question |
| Consumer fintech growth leadership | Weakly for a credit book | Acquisition skill transfers, credit cost discipline rarely does, and the gap shows a cycle later |
| Direct selling agent or distribution leadership | Partially | Excellent channel depth, usually no policy or economics ownership |
A note on the fifth row, because it is a recurring and expensive hire. Growth leaders from non-credit consumer businesses can grow a loan book quickly, and the damage does not appear for three to four quarters, by which time the vintages are written. Where this hire is made, it must be paired with genuinely independent risk authority.
How to assess
Ask about a book that went bad. The single best question. Which product, which cohort, what the early signals were, whether the data showed it before anyone acted, and what they changed. Lending leaders who have only grown have not been tested, and the Indian market has provided enough cycles that anyone senior has seen one.
Ask for their vintage curves. Can they describe loss performance by origination cohort for a book they ran, and explain what moved between cohorts? This separates people who owned the economics from people who owned the target.
Probe the channel and credit link. "Which of your channels had the worst credit performance, and what did you do about it?" Strong candidates have measured this and have usually shut something off. Weak candidates discuss channels purely in acquisition terms.
Test the policy conversation. "Risk wants to tighten the cut-off on your largest segment. How does that discussion go?" The answer reveals whether they can make a commercial case within a governed process or whether they expect to win on authority.
Check regulatory reasoning. "The multi-lender display obligation applies to your main distribution partner. What changes?" This is a current, concrete test of whether they are tracking the rules as a commercial input.
Ask what they would stop lending. A Head of Lending who cannot name a product or segment they would exit is describing a growth role.
The search reality
Settle the policy boundary before going to market. It is the brief problem for this role, and it causes more failed processes than compensation does. Candidates will ask in the first conversation.
The pool is concentrated and employed. The people who have run a digital lending book through a full credit cycle in India number in the low hundreds, across a recognisable set of lenders, banks and NBFCs. These are mapped and directly approached searches rather than advertised ones; our method is described in how we search.
Expect candidates to diligence the book. Senior lending candidates ask for portfolio quality data, vintage performance and the funding position before they engage seriously, and they are right to. Companies not prepared to share something meaningful under confidentiality lose the strongest candidates early and rarely learn why.
Compensation should reflect the credit cycle, not the quarter. Variable pay tied to disbursement volume alone produces exactly the behaviour that damages a lender, on a lag that outlasts the payout. Structures tied to a book-quality qualifier, or deferred against vintage performance, both align the incentive and signal to candidates that the company understands its own business.
Sequence against the mandated appointments. A lender approaching the thresholds that trigger the Chief Risk Officer and Chief Compliance Officer requirements should plan those alongside this hire rather than after it, because the policy boundary this role depends on is defined by whether that independent risk function exists.
Common questions
What does a Head of Lending do?
Owns the loan book: origination volume and mix, product set, pricing including the all-inclusive annual percentage rate, distribution channels and partnerships, unit economics after acquisition cost and credit cost, and some or all of credit policy depending on the organisation's structure. In many Indian digital lenders the role also owns collections, which gives it the full credit lifecycle and the right incentives.
Should credit policy sit with lending or with risk?
With risk in any scaled or regulated lender, and the RBI's framework pushes firmly in that direction: an NBFC above ₹5,000 crore in assets must appoint a Chief Risk Officer who holds no other responsibility and carries no business targets. Early-stage lenders often keep policy with lending for speed, which is defensible while the board can see the book directly. The structure that fails is leaving it undefined, because the conflict between volume incentives and cut-off authority then gets resolved informally in favour of volume.
What should we look for in a digital lending leader?
Someone who has run a book through a deterioration, not only through growth. Ask for vintage curves by origination cohort and what moved between them, which channel performed worst on credit and what they did about it, and what product or segment they would exit. Regulatory fluency is now a commercial requirement rather than a compliance one, because rules such as the multi-lender offer display obligation directly change channel economics.
Can we hire a growth leader from consumer fintech into a lending role?
With care, and only alongside genuinely independent risk authority. Growth leaders from non-credit consumer businesses can scale origination quickly, but credit cost discipline rarely transfers, and the consequence appears three to four quarters later when the vintages are already written. Where this hire is made, the credit policy must sit firmly with risk and the compensation must not be tied to disbursement volume alone.
How should a Head of Lending be compensated?
Against book quality as well as growth. Variable pay tied purely to disbursement encourages origination that damages the business on a lag longer than the payout cycle, which is the structural failure mode of the role. Tying variable pay to vintage performance, deferring part of it, or applying a portfolio-quality qualifier aligns the incentive with the job. Candidates worth hiring generally prefer this, because it signals the company understands its own economics.