Materializing its big lending push, fintech major PhonePe has launched merchant lending services on its platform.
Through its marketplace model, PhonePe will leverage its technology and distribution network to facilitate loans to its current 35 million-large merchant base via banks and NBFC (non-banking financial company) partners.
The underwriting, disbursals and loan collection will be done by the latter.
Interestingly, earlier there were talks about the Walmart-backed fintech eying NBFC licenses. The latest offering by the digital payment player puts it at par with its rivals Paytm and BharatPe, which had already launched the service in the past and added a significant revenue pipeline.
The development comes a few months after the much-talked-about deal between the fintech major and buy-now-pay-later (BNPL) platform ZestMoney fell through. PhonePe was looking to foray into consumer lending via the acquisition.
As per the spokesperson, PhonePe has facilitated the disbursal of over 20,000 loans since May 2023.
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“We are currently integrated with three partners and there are 3-4 more partners we are working with to make it a comprehensive marketplace for lenders,” he said.
The loan amount would range from Rs 15,000 to Rs 5 lakh, depending on the merchant.
“Our in-depth understanding of a merchant’s transactional behavior is a strong dimension that validates the health of the merchant’s business. Furthermore, PhonePe is actively developing its own credit score using cutting-edge data science-driven models, which further augments the partner’s lending process and empowers SMEs to access credit with greater ease,” the company stated.
Founded in 2015, PhonePe claims to have 46.5+ crore registered users and 3.5+ crore offline merchants in its payments network. The firm, which holds 50% market share by value in UPI payments, hit an annualized total payment value run rate of $1 trillion in March 2023.
The fintech also rolled out its payment gateway as it looks to tap into larger offline and online merchants, including small and medium businesses. With the launch, the fintech firm no longer has to depend on external gateways for its in-app payments.
The firm forayed into financial services in 2017, offering several mutual funds and insurance products.