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Lending
Loan against securities
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Loan Against Securities
Lending against shares and mutual funds moves at market speed. Prices change every day, and so does the value backing each loan. Frappe Lending values every pledged security, works out the drawing power after haircuts, checks loan-to-value daily and flags shortfalls early, all in one open-source system with accounting built in.
1.
Configure security types
2.
Keep security prices current
3.
Pledge securities, see the eligible amount
4.
Disburse against drawing power
5.
Catch margin shortfalls early
6.
Release securities safely
Configure security types
Group pledgeable assets into types such as listed equity shares, equity mutual funds or debt funds, and give each type its own haircut and loan-to-value ratio. Individual securities can override the haircut, so a volatile small-cap stock never gets the same treatment as a blue chip.
Keep security prices current
Record a price for every security with a validity window. Frappe Lending rejects overlapping windows, and the moment a new price is saved it recalculates the sanctioned limit of every borrower holding that security. Enter prices by hand or bulk import them from your market data source.
Pledge securities, see the eligible amount
Borrowers list the shares and fund units they want to pledge on the loan application. Frappe Lending values each holding at the current price, applies the haircut and arrives at the maximum loan amount. On sanction, a Loan Security Assignment records exactly what is pledged against the loan.
Disburse against drawing power
Run loans against securities as demand loans or lines of credit with limit validity dates. Every disbursement is checked against the post-haircut value of the pledged portfolio, and fresh drawdowns are blocked while a shortfall is open.
Catch margin shortfalls early
A scheduled job compares each borrower's outstanding amount with the current value of their pledged securities every day. When the loan-to-value ratio is breached, Frappe Lending raises a Loan Security Shortfall with the exact amount and percentage. Borrowers cover it by repaying or pledging more securities, and it closes on its own once prices recover.
Release securities safely
Borrowers can ask for part of their portfolio back at any time. Frappe Lending checks every request against the quantity pledged and the loan-to-value that would remain, and closes the loan automatically once the last security is released.
What is Frappe Cloud?
Application + Infrastructure
benefits
Why Frappe Lending for loans against securities
1
100% open source & API-first
No licensing fees and no vendor lock-in. Connect your trading platform or market data feed through REST APIs and extend the product to fit your book.
2
Scalable & trusted
Designed for high-volume lending, used by Zerodha, Kinara Capital, and other leading institutions.
3
One system from pledge to closure
Applications, pledges, disbursements, interest accrual, repayments and releases live in one place, so operations never reconcile across tools.
4
Built-in compliance & risk monitoring
Daily loan-to-value checks run alongside automated DPD tracking and NPA classification, so risk teams see market and credit risk together.
5
Accounting, billing & taxation
Every disbursement, accrual and repayment posts to integrated ledgers, keeping your books accurate and audit-ready.
6
Exposure reports out of the box
Loan Security Exposure, Applicant-wise Loan Security Exposure, Loan Security Ledger and Loan Security Status reports show concentration by security and borrower at any moment.
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