There is a quiet shift happening in Indian lending right now. It is not loud. There are no press releases about it. But if you are running an NBFC, a broking firm, or a fintech lending platform and you are not paying attention, you will feel it in your numbers before you understand what happened.

Loan Against Mutual Funds, or LAMF, has moved from a niche product offered by private banks to a mainstream credit instrument that fintechs, super apps, and digital lenders are racing to launch. One of India's largest consumer payment apps launched its LAMF product in 2025 in partnership with a tech-focused NBFC, giving users a secured credit limit of up to Rs 2 crore in under 10 minutes, entirely within the app. If platforms at that scale are now in this space, the signal is clear. LAMF is not a future opportunity. It is a present one that some of your competitors have already claimed.

What Is LAMF and Why Are Borrowers Choosing It Over Personal Loans

A Loan Against Mutual Fund is a secured loan where the borrower pledges their mutual fund units as collateral to access funds without selling their investments. The portfolio continues to grow and compound during the loan tenure. Any SIPs the borrower has running continue uninterrupted. The lender places a lien on the pledged units, which is lifted once the loan is fully repaid.

For the borrower, this is a genuinely better deal than a personal loan in almost every way:

• Interest rates on LAMF typically range between 10% and 12% annually, compared to personal loan and credit card rates that can go as high as 44%
• Since mutual fund units act as collateral, lenders do not require exhaustive paperwork or deep credit history checks. Basic KYC and proof of fund ownership is often enough
• The loan is structured as an overdraft facility, which means the borrower only pays interest on the amount actually withdrawn, not the entire sanctioned limit
• LTV ratios go up to 50% for equity mutual funds and up to 80% for debt mutual funds, giving borrowers real liquidity without exiting their long-term positions
• There is no need to break a fixed deposit, liquidate a portfolio, or take a high-interest personal loan for a short-term cash need

For a salaried investor sitting on a Rs 15 lakh mutual fund portfolio who needs Rs 5 lakh urgently, LAMF is a straightforward decision. They keep their portfolio intact, pay a competitive interest rate, and get funds in minutes. The question is not whether they will use this product. The question is whose platform they will use it on.

The Infrastructure That Makes 10-Minute LAMF Possible

A lot of lenders look at LAMF and assume the difficulty is in the lending decision itself. It is not. The difficulty is in the plumbing underneath, and most institutions underestimate it until they are already mid-build and stuck.

To offer LAMF at speed and scale, your system needs to handle all of the following without a human stepping in between:

• Fetch and verify the borrower's mutual fund holdings in real time via CAMS and KFintech integrations
• Assess current NAV and calculate the eligible loan amount based on your internal LTV policy
• Trigger lien marking on the pledged units digitally through registrar APIs
• Complete KYC verification and loan agreement execution within the same borrower flow
• Disburse the approved amount directly to the borrower's linked bank account

Since mutual fund data is already digitised and available through CAMS and KFintech, the entire loan process can theoretically be automated end to end. Many lenders now offer instant or same-day approvals with minimal documentation, especially for funds held in demat form. But this only works if your technology stack is correctly integrated with these systems from day one.

A manual or semi-manual process breaks the experience entirely. A borrower who has to wait three days for lien marking on a product that the market has trained them to expect in ten minutes will go somewhere else and not come back.

Why NBFCs and Broking Firms Are the Natural Owners of This Product

Banks have LAMF. Super apps are now entering. But NBFCs and broking firms arguably have the strongest natural position in this market, and most of them are not exploiting it yet.

The Broking Firm Advantage

Broking firms already have the customer's demat account. They already know the portfolio value, the fund types held, and the customer's investment behaviour. The trust relationship is already established. What is missing is:

• A lending licence or NBFC partnership to originate the loan
• A LAMF-specific workflow that connects demat holdings to loan disbursement
• An overdraft management layer that handles interest, repayments, and lien release

The NBFC Advantage

NBFCs have the regulatory standing and lending experience that super apps and broking platforms often lack. What they typically miss is:

• Technology to automate the CAMS and KFintech integration
• A lien marking workflow that runs without manual intervention
• An overdraft management system that keeps the product compliant at scale

Both of these are infrastructure problems, not product problems. The product already makes complete sense to the borrower. The infrastructure just needs to be in place on the lender's side for it to work at the speed and scale the market now expects.

What Happens If You Keep Waiting

The LAMF market in India is not going to stay open for everyone forever. Consumer platforms with hundreds of millions of daily active users are already in this space with polished, integrated experiences. Once a borrower activates LAMF on a platform they already use every day, they are unlikely to switch to a new lender for the same product.

Lending relationships are sticky by nature. The first lender to offer a seamless LAMF experience to a borrower tends to keep that borrower for years. Every month you delay is a month in which a competitor is building that relationship with your potential customer.

Here is what that delay actually costs you:

• Lost acquisition opportunities as borrowers find LAMF elsewhere and stick with that lender
• Reduced stickiness in your existing customer base as competitors offer a product you do not
• A harder and more expensive launch later when the market is already shaped around established players
• Brand perception risk as customers start associating your platform with being behind the curve

Being second in lending is a harder position than most founders and product teams appreciate until they are already in it.

How Letsfin Helps You Launch LAMF Without Building From Scratch

Letsfin is a B2B fintech infrastructure marketplace built specifically for institutions that need to move fast without spending years and crores building proprietary technology stacks. LAMF infrastructure is one of Letsfin's core offerings, designed to give NBFCs, broking firms, and fintech platforms the full technology backbone they need to offer Loan Against Mutual Funds at the speed and scale the market now demands.

What Letsfin's LAMF Infrastructure Covers

• End-to-end integration with CAMS and KFintech for real-time portfolio fetch and lien marking
• Automated LTV calculation and eligible loan amount assessment based on your internal credit policy
• Digital agreement and eSign flow built directly into the borrower journey
• Overdraft account management with interest computation and repayment tracking
• Compliance-ready architecture aligned with RBI guidelines on Loan Against Securities
• Configurable workflows that match your brand, your credit policy, and your borrower experience

Why Institutions Choose Letsfin

What this means practically is that an NBFC or broking firm working with Letsfin does not need to separately negotiate with CAMS, build its own lien marking workflow, or stitch together multiple vendors to make LAMF work end to end. The infrastructure comes pre-integrated and is configurable to your specific business requirements from day one.

Letsfin's model is built around one idea: the best fintech infrastructure should not be available only to the largest players who can afford to build it themselves. It should be accessible to any institution that is serious about growing, willing to move fast, and ready to offer their customers something the market is already asking for.

If you are an NBFC, a broking firm, or a lending platform that has been thinking about LAMF but has not moved yet, the window is still open. Reach out to the Letsfin team, understand what a LAMF launch would actually look like for your organisation, and find out how quickly it can happen.