Paytm expands loan distribution business with focus on higher-ticket loans

The parent company of Paytm, a well-known mobile payments and financial services provider in India, One97 Communications Limited (OCL), plans to expand its credit distribution business. In partnership with large banks and non-banking financial corporations(NBFCs), the company hopes to intensify its focus on providing higher-ticket personal and merchant loans. This calculated action is meant to go after high-credit, lower-risk clients.

Motivated by the strong performance of its current portfolio and the favourable reception to its loan distribution services, Paytm launched this expansion initiative last quarter and saw encouraging initial results.

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Paytm has decided to recalculate the origination of portfolios valued at less than ₹50,000 after consulting with lending partners and taking into account recent macroeconomic events and regulatory guidance. The postpaid loan product in particular will now make up a lesser portion of Paytm’s loan distribution business. But since these loans are unaffected by recent regulatory guidance, the emphasis on merchant loans for MSMEs—which support small merchants—remains unaltered.

Paytm’s spokesperson highlighted the maturity of the lending distribution business, emphasising the identification of new opportunities for growth in providing high-value personal and merchant loans. The company remains committed to maintaining a focus on generating high-quality portfolios for lending partners while ensuring rigorous adherence to risk and compliance standards. The spokesperson expressed confidence that this expansion will enhance overall business growth, building on the success and acceptance of Paytm’s loan distribution services.

Paytm said in their statement that they are dedicated to growing its lending partner network, which includes banks and non-bank financial companies (NBFCs), as it develops its loan distribution business.