Someone on our team recently asked, “Why do we only offer Loan Against Securities on Zerodha Capital?” Why not personal loans or credit cards with their higher interest rates?

The simple answer is we can’t do anything different there. And our cost of funds doesn’t work. We’re at ~8.5%, while banks raise money at ~3.5%, and large NBFCs around ~7%.

Can’t compete on rates, and usually the best borrowers go where the rates are the lowest. Without a rate advantage, we’d only attract borrowers rejected elsewhere, typically those with lower credit scores.

Additionally, unsecured lending means recovery agents, constant collection calls, and the entire process of chasing repayments. That’s exactly the kind of incentive cycle we don’t want to participate in. Also not good for the brand we have built.

LAS is fundamentally different. RBI mandates a 50% haircut on securities, making it structurally safer. Borrowers have assets worth at least 2x the loan amount, so we know they can afford it. Lower risk means we can offer lower rates (10-11%).

More importantly, it aligns with our philosophy: credit should be used only when genuinely needed and within your means, not just because it’s easily available.

Our real advantage is that customers already hold securities with Zerodha. LAS is a natural add-on to core broking, not an aggressive lending play. In most markets, brokers don’t even need an NBFC license for this. It’s essentially a broking function.

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