Paytm shifts focus to higher ticket loans in partnership with banks and NBFCs
Paytm, operated by One97 Communications Limited (OCL), a leader in mobile payments and financial services in India, has announced a significant shift in its loan distribution business. The company is now expanding its services to offer higher ticket personal and merchant loans, targeting low-risk and high creditworthy customers. This move, in partnership with large banks and Non-Banking Financial Companies (NBFCs), marks a new chapter in Paytm’s credit distribution journey.
Targeting High-Value Loan Segments
Acknowledging the robust performance and acceptance of its loan distribution services, Paytm has recently initiated this strategic shift. The company’s focus on higher-value loans aligns with recent macroeconomic developments and regulatory guidelines. Consequently, Paytm is recalibrating its portfolio to reduce the distribution of loans under ₹50,000, primarily in the postpaid loan segment, and will now emphasize higher ticket loan distribution.
Regulatory Shifts and Paytm’s Strategic Response
Paytm’s decision to adjust its loan distribution strategy is a response to recent regulatory guidance and market trends. This recalibration aims to drive a healthier portfolio for its lending partners. Merchant loans, particularly for MSMEs, will remain a focal point, as these business loans are not impacted by the latest regulatory changes.
Future Prospects for Paytm’s Loan Distribution Business
A Paytm spokesperson highlighted the maturation of the lending distribution business and the emergence of new opportunities to offer high-value personal and merchant loans. With a commitment to high portfolio quality, risk management, and compliance, Paytm envisions this expansion as a vital step in growing its business. The addition of new banks and NBFCs as lending partners further solidifies Paytm’s position in the loan distribution market.
As Paytm navigates the dynamic fintech landscape, its shift towards higher ticket loans represents a strategic adaptation to changing market conditions and regulatory environments, positioning the company for continued growth and success in the financial services sector.