8. LOS / LMS — Build vs Buy
Sub-pages
Section titled “Sub-pages”| Page | Covers |
|---|---|
| 8.1 Vendor deep dives | All major Indian LOS / LMS / co-lending vendors on one page with what each does, strengths, weaknesses, suitability |
| 8.2 Recommended stack | The fast MVP / scalable / enterprise stack recommendations + what to build vs buy |
The build-vs-buy question is not binary
Section titled “The build-vs-buy question is not binary”It’s a per-module decision, weighted by:
- Domain specificity — domain rules / policy / co-lending allocation tend to require build because they’re competitive.
- Vendor maturity — BSA / KYC / eSign are best-in-class as vendor offerings; building from scratch is wasteful.
- Switching cost — LMS is heavy switching; buying mid-flight is risky.
- Stage — at MVP, buy more; once
₹100Cr+book, build more in domain-critical areas. - Regulatory perimeter — vendor that’s RBI-aligned reduces risk.
Quick reference
Section titled “Quick reference”| Module | MVP | Production at scale |
|---|---|---|
| LOS | Buy or borrow from a vendor MVP; build at year 2 for IP control | Build (with vendor primitives) |
| LMS | Buy or borrow; build at year 2-3 | Build (core domain IP) |
| Co-lending allocation + settlement | Build | Build |
| BSA, KYC, eSign, NACH, AA, GST | Buy | Buy |
| Underwriting rule engine | Buy framework (Drools / decision tables); build rules | Same |
| Workflow engine | Buy framework (Camunda / Temporal); orchestrate own flows | Same |
| Borrower portal | Build | Build |
| Admin console | Build | Build |
| Analytics | Build on warehouse + BI tool (Buy the tool) | Same |
Why build LMS is the controversial recommendation
Section titled “Why build LMS is the controversial recommendation”Off-the-shelf LMS vendors in India serve a broad lender population with broad needs. They’re great for ₹10 – 500 Cr mid-sized NBFCs running standard products. They struggle with:
- Co-lending operational complexity at high volume.
- Custom workflow for SCF / anchor-led / DLG-bearing portfolios.
- Multi-tenant productisation later if you want to sell the platform.
- Real-time analytics integration.
For this wedge — SME WC + co-lending + CA/Tally distribution + eventually SaaS productisation — building the LMS pays back by year 2 because the platform itself becomes part of the value proposition.
At MVP (₹0 – 30 Cr book, first 12 months), buy to ship faster; plan the migration to own LMS by year 2.
Why buy for primitive integrations
Section titled “Why buy for primitive integrations”PAN / GST / Aadhaar / V-CIP / CKYC / NACH / eSign / BSA vendors have invested years in regulatory licences, bank relationships, and parsing R&D. Re-building these is years of work with no competitive advantage.
The pattern: buy primitives, build orchestration and domain.
See 8.1 for vendor-by-vendor analysis and 8.2 for the recommended stacks.