FAQ - Jifiti

Question 1

What is embedded lending?

Accepted Answer

Embedded lending is the delivery of a loan product within a third-party environment, such as a merchant checkout, an in-store point of sale or an ERP system, rather than through the lender&#8217;s own app or branch. The borrower encounters financing at the moment of need without being redirected to the bank. For financial institutions, it is a new-to-bank customer acquisition and channel expansion strategy: the same loan product reaches borrowers through merchant and partner environments the ban

Question 2

What is the difference between embedded lending and traditional digital lending?

Accepted Answer

Digital lending refers to a bank offering a complete loan journey through its own channels, such as its website or mobile app. Embedded lending goes further: the loan is offered inside a third-party environment, such as a merchant checkout or a business software platform, at the moment the borrower needs credit. A bank can operate both models simultaneously using the same underlying platform. The distinction matters for strategy because the two models require different technology and different m

Question 3

What is the difference between fintech BNPL and bank-led installment financing?

Accepted Answer

BNPL products from fintech lenders like Klarna or Affirm are delivered under the fintech&#8217;s brand. The fintech holds the customer relationship and the credit exposure. Bank-led installment financing operates differently: the bank is the lender, the product carries the bank&#8217;s brand, and the merchant serves as a distribution channel. Banks retain the customer relationship, benefit from lower cost of capital and maintain control over underwriting criteria. The challenge has historically

Question 4

How do banks generate revenue from embedded lending?

Accepted Answer

Banks generate revenue from embedded lending through interest income on the loans they originate and, in some structures, fees associated with loan processing or merchant discount rates on financed transactions. The embedded channel matters because it expands loan origination reach without proportionally increasing acquisition costs. When a borrower applies for financing at a merchant checkout, the bank acquires a new borrowing relationship in a context where the customer already intends to tran

Question 5

What technology does a bank need to offer embedded lending?

Accepted Answer

Banks need five core capabilities: an automated customer onboarding process, a digital loan origination system that processes loan applications in real time at a third-party point of contact, an orchestration layer that connects the lending process to KYC, fraud, AML and e-signature services, a disbursement capability that moves funds to the merchant or borrower in the correct format, and a loan management system and reporting layer that tracks program performance. Building this from scratch is

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