Paytm loan disbursements jump 779% in Q1

One97 Communications, which owns and operates fintech platform Paytm, has posted a 779% increase in loan disbursements for the quarter ended June 30 to Rs 5,554 crore. On a sequential basis, its lending operations grew 56%, the company said in an exchange filing. Paytm has disbursed 8.5 million loans during the quarter, an improvement of nearly 500% on year.

The Vijay Shekhar Sharma-led company’s credit portfolio annualised run rate improved to Rs 24,000 crore.

“The rapid growth of our lending products brings us an attractive profit pool. We are also seeing increases in average ticket size due to the scale-up of the personal loans business in particular,” the company said.

Paytm, which acts as an aggregator for digital loans, has partnered several banks and non-banks. ICICI Securities expects that by FY26 around 19 million consumers and 1.2 million merchants will avail financing products through the Paytm platform.

Paytm has deployed 3.8 million devices at merchant stores. “The strong adoption of devices also has a correlation with the rise in merchants eligible for loans from our platform,” the company said, as it offers merchant loans through payment devices.

‘Buy Now Pay Later’ (BNPL) loan is the mainstay vertical of Paytm’s lending operations, contributing over 60% to its loan business, followed by the personal loan and merchant loan segments. Last month, the Reserve Bank of India (RBI) directed non-bank prepaid payment instrument (PPI) issuers not to load PPI instruments using credit lines, which is likely to adversely impact the BNPL sector.

On the payments side, the company processed gross merchandise value (GMV) of Rs 2.96 trillion in Q1FY23 — an increase of 101% on year. The GMV processed by the company improved 14% on quarter. The paytm super app saw 49% on-year increase in average monthly transacting users (MTUs) to 74.8 million during the quarter. The company’s super app provides multiple services such as payments, messaging, online shopping and grocery delivery on a single platform.

“The Paytm Super App continues to see heightened consumer engagement for the company’s comprehensive payment offerings. We continue to achieve new records in user engagement,” the company said.

In Q4 FY22, Paytm’s revenue from operations grew 89% on year to Rs 1,541 crore driven by growth in GMV from MDR bearing instruments and robust growth in loan disbursements. The company’s losses widened to Rs 761 crore in Q4 from Rs 442 crore a year ago. ICICI Securities expects Paytm to post operational profit from FY25.

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