First Loan Default Guarantee (FLDG) is a lending model serviced between digital-lending fintechs, and their partner banks and NBFCs. Under these agreements, the fintech originates a loan and promises to compensate the partners up to a pre-decided percentage in case customers fail to repay. The bank/NBFC partners lend through the fintech but from their own books. FLDG helps expand the customer base of traditional lenders but relies on the fintech's underwriting capabilities. A report by an RBI-constituted working group on digital lending has laid down risks of FLDG agreements with unregulated entities. The other concern is that FLDG costs are often passed on to customers.