Paytm to offer high ticket personal and merchant loans
Paytm on Wednesday announced its plans to grow its credit distribution business by providing larger personal and merchant loans in collaboration with major banks and Non-Banking Financial Corporations (NBFCs). The company's focus will be on lower risk and high credit-worthy customers, shifting away from loans under Rs. 50,000 and concentrating on higher ticket loans. Paytm stated in an exchange notification, "We plan to expand offering to include higher ticket personal and merchant loans to lower risk and high credit-worthy customers."
Focus on merchant loans and new partnerships
The company plans to emphasize merchant loans, which are given to MSMEs as business loans. Paytm clarified that these loans are not impacted by recent regulatory guidance since they are intended for business purposes for small merchants. As per Paytm's presentation, the company currently has seven NBFC partners for loan distribution and is working on integrating one large bank and two large NBFCs. These integrations are expected to be completed during Q4 FY24 and Q1 FY25.
Q2 updates and credit card partnerships
In Q2, Paytm's financial services revenue saw a 64% YoY increase, reaching Rs. 571 crore. The number of unique users who have taken loans through the Paytm platform reached 1.18 crore during the July-September FY24 quarter. Loan disbursement also experienced significant growth, with Rs. 16,211 crore disbursed, up 122% YoY. Additionally, Paytm has three credit card partners and is in the process of partnering with one more bank, focusing on RuPay credit cards.
