Paytm, India’s leading mobile payments company, provided an update and outlook on its loan distribution business on Wednesday. The company announced that it will further expand its business to offer higher ticket personal and merchant loans, which will be targeted at lower-risk, high-credit-worthy customers in partnership with large banks and NBFCs.
The company had started working in this direction last quarter considering its strong portfolio performance and widespread acceptance of loan distribution. Paytm has observed encouraging early trends.
Further on the back of recent macro development and regulatory guidance, in consultation with lending partners, in line with its continued focus on driving a healthy portfolio, the company has recalibrated the portfolio origination of less than ₹50,000, which is prominently the postpaid loan product and will now be a smaller part of its loan distribution business going forward.
The company also stated that it will continue to focus on Merchant loans, which are given to MSME as business loans. As these loans are given for business purposes to small merchants, they don’t get impacted by the recent regulatory guidance.
Speaking on the development, Paytm spokesperson said, "As the lending distribution business is maturing, we see newer opportunities of expansion to offer high-value personal and merchant loans. We will continue to focus on originating the high portfolio quality for our lending partners, along with strict adherence to risk and compliance. We have seen great scale and acceptance for our loan distribution business, so we believe this expansion will further aid us to grow the business.”
The company continues to add banks and NBFCs as its lending partners for its loan distribution business. Paytm’s management, shared its plan to partner with newer lending partners and bring onboard two more NBFCs and one bank in the coming few quarters, in an analysts call on loan distribution business.
The management also informed that the share of each lending partner may vary but the company has a strong relationship with all 7 lending partners. “We continue to thrive with each lending partner, calibrate our lending partner and continue to have stronger relationships by adding more. There is no shutting down of product or capital constraint of any kind. There is focus on merchant loans and a lot more activity will be seen in this area,” it added.