Paytm Charts New Course in Loan Distribution Business

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Paytm Charts New Course in Loan Distribution Business
Credit: © Reuters

By Aayush Khanna

One 97 Communications Ltd's (NS: PAYT ) Paytm, the stalwart in India's mobile payments and financial services, unveils an ambitious expansion plan for its credit distribution arm. Recognizing the robust performance and widespread embrace of loan distribution, Paytm strategically ventures into higher-ticket loans for both consumers and merchants in collaboration with prominent banks and NBFCs.

This expansion, propelled by a focus on cultivating a robust portfolio for lending partners, entails the inclusion of higher-value personal and merchant loans. With a keen eye on creditworthiness and a commitment to minimizing risks, Paytm aims to cater to a clientele characterized by lower risk and higher creditworthiness.

The move comes on the heels of recent macroeconomic developments and regulatory guidance. Paytm, in consultation with lending partners, recalibrates its loan distribution strategy, relegating loan products below ₹50,000, including the postpaid loan, to a smaller role in its overall lending portfolio.

Merchant loans, a pivotal component offered to MSMEs for business purposes, remain a focal point for Paytm. Shielded from recent regulatory shifts, these loans continue to support small merchants in their business endeavors.

A Paytm spokesperson emphasized the maturation of the lending distribution business, citing new opportunities to cater to the burgeoning demand for high-value personal and business loans. The company remains committed to upholding portfolio quality, stringent risk management, and compliance adherence. Bolstered by the success and acceptance of its loan distribution arm, Paytm envisions this strategic expansion as a catalyst for continued business growth.

As Paytm continues to forge partnerships with banks and NBFCs, the move signifies a pivotal moment in the evolution of its credit distribution business, promising enhanced financial offerings for a diverse range of consumers and businesses.

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