Foreign Institutional Investors and Digital Lending Regulation: Evidence from India’s Guidelines on Digital Lending

The rapid growth of fintech in emerging markets requires balancing innovation with consumer protection and systemic stability. This paper examines the Reserve Bank of India’s Digital Lending Guidelines (DLG) as a natural experiment, assessing how binding rules on digital lending platforms affect foreign and domestic investors differently. By focusing on partnership-model Digital Lending Apps, the study provides causal evidence of regulatory effects while non-DLA fintech firms serve as a clean control group.


