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Glossary · Industry vocabulary

Lending Service Provider (LSP)

A Lending Service Provider (LSP) is a regulated entity that operates loan products in partnership with one or more balance-sheet lenders, typically a bank or NBFC.

The LSP owns the borrower experience, distribution, and often the technology stack; the partner lender owns the balance sheet and the regulatory licence. LSP-led models include co-lending, BNPL, embedded finance, and the digital lending arms of fintechs. The architectural challenge is multi-partner from day one: tenant isolation, partner-aware reporting, and settlement workflows have to live in the data model, not bolted on later.

See how an LSP differs from an LOS and LMS →

Related terms

  • Loan Management System (LMS)A Loan Management System (LMS) is the system of record for the post-disbursal life of a loan: schedules, repayments, interest accrual, charges, NPA classification, restructuring, write-offs, and the audit log behind every change..
  • LMS RFP (Loan Management System RFP)An LMS RFP (Loan Management System request for proposal) is how a lender evaluates and selects an LMS vendor: scoping requirements, scoring responses, and stress-testing servicing, collections, accounting, audit, security, and AI governance before committing..
  • Loan Origination System (LOS)A Loan Origination System (LOS) is the system that takes a borrower from application to first disbursement: lead capture, KYC, credit decisioning, document collection, agreement generation, and funding..
  • Co-lendingCo-lending is an arrangement where two or more lenders fund the same loan in a fixed ratio, sharing risk and return on a per-loan basis..

All terms in the Lokta lending glossary →

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