New Delhi, Oct. 28 -- Non-bank lenders such as Kinara Capital, Lendingkart, Aye Finance and Ashv Finance are taking a step back from unsecured loans after regulatory heat tightened funding to the sector.

These lenders who serve small businesses have sold unsecured loans, explored such sales, or are securitizing them, the people cited above said on the condition of anonymity. Potential buyers include banks and larger non-bank lenders. The development, which came after a central bank crackdown on the runaway growth in personal, credit card and small business loans, marks a pivot for these lenders and their backers, who had bet on such loans without collateral for growth.

Kinara Capital has started the sale process for its Rs.2,200-crore u...