Paytm’s lending activity reaches an annualized run rate of Rs 34,000 cr; 9.2 million loans disbursed in Q2

Despite quarterly losses, fintech major Paytm continued to see steady growth in its lending business in the September quarter of this fiscal year. The platform disbursed 9.2 million loans worth Rs 7,313 crore in the second quarter, recording 224% year-on-year growth, Paytm said in its income statement.

“[Our] the loan distribution business has grown significantly over the past 12 months, with increased user adoption. We exited the second quarter of FY23 with disbursements in our loan distribution business at an annualized execution rate (ARR) of approximately Rs 34,000 crore,” Paytm explained.

The value of personal loans jumped 736% to Rs 2,055 crore since last September (Q2 FY22). Over 40% of disbursements were made to Paytm Postpaid [the Buy-Now-Pay-Later product] users. The average ticket size (ATS) for personal loans stood at Rs 110,000, while the ATS for merchant loans was Rs 150,000 in Q2 FY23.

Total merchant loans disbursed stood at Rs 1,208 crore, representing a year-on-year growth of 342%. “Repeat loans continue to see good usage, with 50% of merchants having taken out a loan more than once. More than 85% of value disbursed this quarter went to merchants with a deployed Paytm payment device,” the company said in exchange documents.

Meanwhile, Paytm Postpaid, which powers cash purchases with instant credit, disbursed loans worth Rs 4,050 crore, growing by 449%. This was driven by increased user adoption and increased offline and online merchant acceptance, with the network reaching 15 million by the end of Q2 FY23. registered Paytm Postpaid users has now surpassed 6 million. “Postpaid continues to show significant cross-selling opportunities in personal loans and credit cards,” according to the company.

Even though Paytm’s lending business has been steadily growing, the Vijay Shekhar Sharma-led company believes it’s still an underpenetrated market, with more room for growth and high profit margins. .

Paytm Postpaid penetration is 4% of average monthly transacting users (MTU); personal loan penetration is only 0.6% of average MTU; and merchant lending penetration is 4.4% of the total number of devices deployed by Paytm. “Our level of penetration for each product remains low and gives us a long avenue for growth,” the company said.

Overall, Paytm’s revenue in the “Financial and other services” business was Rs 349 crore, up 293% year-on-year, and now accounts for 18% of the company’s total revenue. This is “driven by sourcing and collection revenue in our loan distribution business,” the company revealed.

He added: “Our collections efforts continue to perform well, with indicative portfolio performance of all lending products holding up well. We continue to seek growth and upsell opportunities as low penetration supports future growth potential, while working with our lending partners to maintain healthy credit quality.

Also read: Nykaa, Paytm, Policy Bazaar: 10 IPO lock-up periods expire in November

Also Read: Paytm Q2 Losses Sequentially Reduce to Rs 571 Crore

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