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Paytm Restarts Lending Activities With SMFG India Credit, Shriram Finance; Explores Tie-Up With Muthoot Finance: Report


Paytm has resumed its lending operations, commencing with merchant loans in collaboration with its current partners, including SMFG India Credit (formerly Fullerton) and Shriram Finance, following a hiatus lasting nearly two months, according to a report by Moneycontrol citing sources familiar with the matter. Simultaneously, discussions are in progress to bring on board a new lending partner, Muthoot Finance, to extend both personal and merchant loans, as per the report.

“It resumed around March 21. Over 500 crore loans have been disbursed so far, which includes both top-ups from existing merchants and some new loans,” sources told Moneycontrol.  

This update emerged nearly two months after the fintech firm, spearheaded by Vijay Shekhar Sharma, paused new loan disbursements. This was prompted by requests for additional clarity from its partner banks and Non-Banking Financial Companies (NBFCs) regarding the Reserve Bank of India’s (RBI) directive concerning its banking partner entity, Paytm Payments Bank Limited (PPBL).

Although Paytm and PPBL function as distinct entities, approximately 10-15 per cent of Paytm merchants (equivalent to approximately 60,000-70,000 merchants) have established autopay mandates through their PPBL accounts.

Likewise, in the case of personal loans, a portion of Paytm borrowers had arranged their e-NACH or autopay facilities via PPBL accounts. Subsequently, Paytm has been actively transitioning its settlement accounts to alternative banks, with reports indicating that over 85 per cent of these transfers have been completed, as stated by one of the sources in the report.

“SMFG was Paytm’s biggest lending partner in terms of AUM (Assets Under Management). Almost 50 per cent of disbursements came from it previously. So, getting it back on the block is a big relief for Paytm. But others (lending partners) are yet to catch up,” a senior executive in the banking partnership told Moneycontrol.

With Paytm resuming its loan operations, several other partners are exercising caution regarding their involvement with the company, opting for a “wait and observe” strategy.

Also Read: McKinsey Layoffs: Firm Offers Staff 9-Month Severance Pay Package To Leave, Says Report



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