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Paytm shifts focus to higher ticket loans

Economic Times

Economic Times · 1y ago

Paytm shifts focus to higher ticket loans

Paytm, the Indian digital payments firm, is reportedly shifting its focus to providing higher-ticket loans, as it aims to expand its financial services offerings. The company plans to partner with other financial institutions to offer loans ranging from INR 20,000 to INR 2 lakh ($275 to $2,750). Paytm has already received approval from its board to collaborate with NBFCs (non-banking financial companies) or banks for this initiative.

Related News

Paytm shares tank 20% after company looks to curtail low-value personal loans

Economic Times

Economic Times · 1y ago

Paytm shares tank 20% after company looks to curtail low-value personal loans

Shares of Paytm, operated by One97 Communications, plummeted 20% after the company announced plans to issue fewer personal loans below Rs 50,000 ($600). This decision comes in response to tighter regulations imposed by the Reserve Bank of India (RBI) on consumer lending, particularly for small-ticket loans. Paytm aims to focus on higher-ticket loans to lower-risk and high-credit-worthy customers, expecting a strong demand in this segment. The company estimates a 40%-50% decline in loan volume but minimal impact on revenue growth.

Paytm slumps to A 7-month low, brokerages cut price targets after postpaid loan scale down

Inc42 · 1y ago

Paytm slumps to A 7-month low, brokerages cut price targets after postpaid loan scale down

Shares of Paytm plunged nearly 19% to a seven-month low of INR 661.3 on the BSE, following the company's decision to scale down its postpaid loans or BNPL lending category. Brokerages including Goldman Sachs and Jefferies have cut their price targets on Paytm, with Goldman Sachs also downgrading its rating to 'neutral'. The move comes after Paytm decided to focus on expanding high-ticket personal and merchant loans, following regulatory changes by the Reserve Bank of India. Paytm shares are now trading over 24% higher year-to-date.

Paytm halts postpaid loans, to focus on distribution-only model

Economic Times

Economic Times · 1y ago

Paytm halts postpaid loans, to focus on distribution-only model

Paytm has paused the distribution of postpaid loans since February, signaling a shift in its lending approach. The value of postpaid loans distributed dropped over 90% to Rs 720 crore in the March quarter of FY24. Paytm is becoming more cautious with its small-ticket size personal loans business due to deteriorating asset quality. The company will not disburse collections-based loans unless incentivized to do so through collections bonuses. It will focus more on distribution-only models for personal loans, compressing its take rates in the 3-3.5% range. This follows a regulatory crackdown by the Reserve Bank of India.

Paytm To Resume Loan Disbursals In First Week Of March

Inc42 · 1y ago

Paytm To Resume Loan Disbursals In First Week Of March

Paytm, the Indian fintech giant, plans to resume its loan disbursals in the first week of March. The company had temporarily ceased its small-ticket loans of less than INR 50,000 following tightened regulations by the Reserve Bank of India. Paytm is now looking to restart its lender platform provider operations, aiming to increase high-ticket personal and merchant loans in partnership with banks and non-banking financial institutions. Paytm's lending business grew rapidly in the first three quarters of 2023, with loan disbursals reaching INR 15,535 crore, but experienced a decline due to scaling down of small-ticket loans.

Paytm slowing down low ticket Postpaid loans by around 50%, accelerating high ticket loans

Money Control

Money Control · 1y ago

Paytm slowing down low ticket Postpaid loans by around 50%, accelerating high ticket loans

Paytm has announced that it will be slowing down its small ticket Postpaid loans while focusing on expanding high ticket personal loans and merchant loans. This decision is in line with recent regulatory guidance and aims to ensure a healthy loan portfolio. While there have been complaints from users regarding blocked accounts, Paytm has denied stopping the loan service and claims that it is upgrading the experience and enhancing security measures. The company's lending partners have not stopped lending to its customers.

Paytm among BofA securities’ top picks in Asia pacific for Q1 2024

Inc42 · 1y ago

Paytm among BofA securities’ top picks in Asia pacific for Q1 2024

Paytm, the parent company of One97 Communications, has been listed among BofA Securities' top 10 short-term recommendations for the Asia Pacific region in the first quarter of 2024. Paytm's focus shift towards high ticket, high margin loans is seen as a positive move. Although the recent scaling down of the buy now, pay later (BNPL) business is expected to have minimal immediate impact, Paytm is predicted to turn profitable this year. Regulatory risks and potential stake sales by pre-IPO holders are noted as key risks.

Small loans and the big question on consumption

Money Control

Money Control · 1y ago

Small loans and the big question on consumption

The gross loan portfolio of microfinance institutions experienced a 27 percent growth in FY24. However, there are concerns regarding the shift in loan sizes, with loans below Rs 30,000 shrinking while higher ticket size loans increased. This has led to higher delinquency ratios for larger loans. Additionally, the share of rural areas in the gross loan portfolio has risen to 61 percent in FY24, which may lead to rising indebtedness and potential negative impacts on consumption and rural recovery. Quickening credit growth has been a key factor in India's economic growth.

Irdai accepts registration withdrawal application of Paytm General Insurance

YourStory

YourStory · 1y ago

Irdai accepts registration withdrawal application of Paytm General Insurance

One97 Communications, the parent company of Paytm, is shifting its focus to the distribution of insurance products from other insurers. The Insurance Regulatory and Development Authority of India (Irdai) has accepted the withdrawal application from Paytm General Insurance, allowing the company to explore opportunities for insurance distribution. Paytm aims to double down on insurance distribution and focus on small-ticket general insurance offerings in partnership with other insurers, using its strong distribution network to expand insurance penetration.

Paytm fires over 1,000 across units amid cost-cutting

Economic Times

Economic Times · 1y ago

Paytm fires over 1,000 across units amid cost-cutting

Paytm, the parent company of One 97 Communications, has laid off over 1,000 employees as part of cost-cutting measures. This move is in response to the company's realignment of its various businesses, including the withdrawal from small-ticket consumer lending and the 'buy now pay later' sector after regulatory restrictions on unsecured loans. These job cuts are expected to affect around 10% of Paytm's overall workforce. The company aims to reduce staff costs by 10-15% through artificial intelligence-led automation and a focus on payment services and wealth management.

Indian banks ask fintech partners to limit tiny personal loans amid regulatory glare

Economic Times

Economic Times · 1y ago

Indian banks ask fintech partners to limit tiny personal loans amid regulatory glare

Indian banks have asked their fintech partners to reduce issuing small personal loans following the Reserve Bank of India's stricter regulations to cover personal loans. Paytm has already announced that it will slow down on sub-50,000-rupee loans. While the pullback may affect the availability of such loans, banks are not severing ties with fintech partners altogether. The move comes in response to concerns about higher risk and the need for more capital to cover personal loans and lending via NBFCs.

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