Paytm expands credit distribution business, extends higher ticket loans to consumers, merchants

Paytm, India’s leading mobile payments and financial services distribution company, on Wednesday said it will expand its credit distribution business in partnership with large banks and NBFCs by offering higher ticket personal and merchant loans to lower risk and high credit-worthy customers.

Owing to the strong portfolio performance and widespread acceptance of loan distribution, Paytm witnessed encouraging early trends when the company started working in this direction last quarter.

“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,” said a Paytm spokesperson.

In the light of recent macro development and regulatory guidance and in consultation with lending partners, the company remains focused on driving a healthy portfolio and has recalibrated the portfolio origination of less than Rs 50,000 – prominently the postpaid loan product will now be a smaller part of its loan distribution business moving forward.

Paytm continues to focus on merchant loans that are lended to MSME as business loans. Given that these loans are extended for business purposes to support small merchants, they remain unaffected by the recent regulatory guidance.

The company said it continues to add banks and NBFCs as its lending partners for its loan distribution business.