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Paytm ready to roll the dice on its lending business

May 15, 2023

Paytm ready to roll the dice on its lending business
At a time when fintechs are finding it difficult to build loan sourcing partnerships with traditional NBFCs and banks, Paytm is doubling down on this business as a loan origination platform.

In the process it has strengthened its topline as well. But what kind of scale will Paytm need to make money, cover its losses and justify its valuation. That question will eventually be answered over the next few quarters.
 
The company has managed to grow its disbursals 250% to ₹12,554 crore in March 2023 from ₹3,553 crore in March 2022.
 
This is backed by balance sheet support from its partner NBFCs, such as Aditya Birla Capital, Hero Fincorp, Piramal Finance, Clix Capital and others.
 
What is also helping Paytm stand out in this competitive space is its in-house collection capabilities. Two sources in the know have told ET that Paytm has arrangements with these lenders promising certain levels of collection efficiency.
 
“Given that FLDG arrangements are not encouraged by the central bank, someone like Paytm can bring confidence to its partner lenders with its collection pitch, it can help collect loans that were disbursed through its platform over a year or so,” said a top fintech executive, on condition of anonymity.
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