Paytm is expediting high-ticket loans while around 50% delaying down low-ticket postpaid loans

 Paytm is expediting high-ticket loans while around 50% delaying down low-ticket postpaid loans

Paytm is expediting high-ticket loans while around 50% delaying down low-ticket postpaid loans

Due to the RBI's decision to tighten guidelines for unsecured consumer loans, Paytm was compelled to reduce the size of its lending operations.

In an analyst meeting on December 6, Paytm said that it would be slowing down its small-ticket postpaid loans while looking to boost its higher-ticket merchant and personal loan offerings.

The business said that although postpaid loans may drop by 50%, margins and revenue would remain unaffected. According to the business, postpaid had the lowest take rate and would thus have the least effect on revenue.

The company released a media statement stating that it has "recalibrated portfolio borrowings of less than ₹50,000, which is primarily a postpaid financial product and will now form a small part of its loan distribution business going forward, taking into account recent macro developments alongside regulatory guidance, through discussions with lending partners, in line with its persistent emphasis on driving a healthy portfolio."

According to the business, none of its lenders have ceased making loans to its clients.

Many consumers have expressed their dissatisfaction on the social media site X (previously Twitter) after Paytm slowed down its postpaid lending offerings on the platform starting on December 1. Despite making on-time loan payments, several individuals' accounts have been banned, according to complaints.

After a few users reported seeing the statement "We're upgrading the experience and enhancing security measures," MoneyControl got in touch with them. We'll return shortly.

Through collaborations with lenders including Aditya Birla Finance Limited (ABFL), Piramal Finance, Shriram Capital, and Tata Capital, Paytm provides loans on its platform. For the loans offered on its platform, Paytm receives commission in addition to collection costs.

Some loan accounts have been canceled as a result of the RBI tightening the guidelines for unsecured consumer loans by raising the risk weights for banks and non-banking financial firms (NBFCs). One-fourth of Paytm's earnings comes from its loan section.

According to news sources, ABFL may have stopped lending on Paytm and other fintech platforms entirely or in part. Whether or not additional loan partners have followed suit is unclear.

Paytm has informed certain customers that "ABFL has approved your postpaid loan facility at its own discretion. They have now stopped this facility. When you are able to reapply for the facility, we will notify you." Will not stop updating.