DLG / FLDG (Default Loss Guarantee) (डिफ़ॉल्ट लॉस गारंटी (डीएलजी/एफएलडीजी))
DLG (Default Loss Guarantee), earlier called FLDG, is an arrangement where an LSP or fintech promises to cover a lender's losses on loans it sourced, capped by RBI at 5% of that loan portfolio. It shifts some risk to the fintech, but the regulated lender still owns the loans and must classify defaults honestly.
Worked example
An LSP sources a ₹10 crore portfolio for an NBFC with a 5% DLG: the guarantee covers at most ₹50 lakh of defaults. Your own loan terms do not change — you still owe the NBFC, not the LSP.