Unraveling Incentive Complexities in NBFCs


In the competitive landscape of NBFCs, incentive programs are crucial for attracting and retaining talent while driving efforts to sell a wide range of financial products and services, including loans, insurance, and wealth management. By offering competitive incentives, NBFCs motivate employees to outperform competitors, diversify revenue streams, and enhance customer engagement across various product lines. This article covers typical incentives components and their nuances that an NBFC should consider while working on an incentive plan for their sales, credit and collections teams

Typical Incentive Components in an NBFC

Disbursal Amount

No. of Logins


Disbursal Amount

Incentive paid to the salesperson when the agreed-upon amount is paid into (their client) the borrower’s account and is available for use. The cash is debited from the financial services provider’s account and credited to the borrower’s account.

A situation where a borrower fails to pay their loan as agreed upon in the loan agreement. In other words, delinquency occurs when borrowers fall behind on their payments and in such case, the salesperson is impacted with a negative incentive

The duration in number of days required to disburse the first part of the loan amount to the customer. NBFCs pay positive or negative incentives as the number of days needed to disburse increase after logins are created.

In NBFCs, incentives on collections refer to rewards or bonuses provided to employees based on their success in recovering outstanding loan payments or debts from borrowers. These incentives are designed to motivate collection agents or teams to maximize the recovery of overdue amounts, reduce delinquency rates, and improve the overall quality of the loan portfolio.

No. of Logins

A login or "credit login" typically refers to the process by which a borrower accesses their account or profile through the NBFC's digital platform to view information related to their credit facilities or loans.

As an ever-evolving industry, NBFC organizations keep on introducing new products. Additionally, mature products usually don’t need selling efforts. Eligibility is organizations considering only a set of products from an incentivization standpoint

Boosters are accelerators applied on any incentive components upon achieving or exceeding in a specified time. As an example disbursements done in in first week of month may have a different booster vs done in last week of month

Disbursal timeliness incentives in NBFCs refer to rewards or bonuses provided to employees based on their efficiency in disbursing loans or credit facilities to customers within a specified timeframe. These incentives are designed to motivate employees to process loan applications quickly, ensuring that customers receive timely access to funds while also minimizing delays in the lending process.


Yield typically refers to the income return generated on an investment over a specific period, expressed as a percentage of the investment's initial value. In the context of NBFCs, yield can represent the interest income earned on loans, securities, or other investments made by the company. It reflects the profitability of the NBFC's lending and investment activities and is a key indicator of its financial performance.

Sales contests provide a structured and competitive environment that provides Sales personnel or Branch Manager an opportunity to win prizes and garner recognition. This energizes sales teams, boost morale, and inspire them to put in extra effort to achieve their goals.

Weighted RoI is a more comprehensive measure that considers the return generated on all investments made by the NBFC, weighted by the size or value of each investment. Weighted RoI provides a more holistic view of the NBFC's investment performance.

Given the access to individuals with varying demographics, NBFCs can also dwell in to distributing products of other financial services organizations. Sales personnel or branch managers get a % of sale or flat incentive upon selling these products

Dealer / Broker Commissions

NBFCs employ dealers, agents or channel partners outside the existing set of inhouse employees to increase their reach and sell products to a broader target market. These usually are freelance agents or firms who get a commission as a % of sale of products.

As independent firms selling NBFC products they need to raise invoices of commission earned over a specific period. Given every firm may have unique formats, NBFCs prefer creating these invoices in a standardized format on behalf of these channel partners. Incentivate ensures accuracy and consistency by autonomously creating invoices on behalf of these partners. Moreover, it facilitates the seamless transmission of these invoices through various communication channels, allowing for digital acknowledgment through various eSignature platforms. This expedites the invoicing process and minimizes the likelihood of delays in payouts for all channel partners


In summary, NBFCs operate in a highly fluid environment and need effective incentive programs to improve operational efficiency, ensure compliance, and gain a competitive advantage in the complex and dynamic financial services landscape. Given the complexities and high volume to be handled on a daily basis it is imperative for NBFCs to leverage incentive automation platforms