01 Mar , 2022 By : Kanchan Joshi
Brokerage firms trying to monetize retail customers using ‘Buy Now Pay Later’ (BNPL) type of products for investments is a worrying trend, as per Zerodha's founder and chief executive officer (CEO) Nithin Kamath, who believes that it is not good for the customer & if the customer does not do well with their money, it is also as not good for the brokerage firm & the stock markets overall.
“Investing using borrowed money reduces the odds of profitability significantly because of interest and margin requirements. The risk of leverage is forced liquidation of stock holdings when there is peak volatility, panic, and at the worst possible prices," Kamath said in a tweet.
Brokerage firms trying to monetize retail customers using ‘Buy Now Pay Later’ (BNPL) type of products for investments is a worrying trend, as per Zerodha's founder and chief executive officer (CEO) Nithin Kamath, who believes that it is not good for the customer & if the customer does not do well with their money, it is also as not good for the brokerage firm & the stock markets overall.
“Investing using borrowed money reduces the odds of profitability significantly because of interest and margin requirements. The risk of leverage is forced liquidation of stock holdings when there is peak volatility, panic, and at the worst possible prices," Kamath said in a tweet.
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