The move will lead to a near 40%-50% drop in the volume of loans given out through the platform’s post-paid product
Indian digital payments firm Paytm said on Wednesday it will cut down on disbursing loans under 50,000 rupees ($600.14), weeks after the central bank tightened rules on consumer lending after a surge in demand.
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The move will lead to a near 40%-50% drop in the volume of loans given out through the platform’s post-paid product, Bhavesh Gupta, President and chief operating officer of Paytm, said on a call with analysts.
The impact on Paytm’s revenue growth will be minimal, he added.
The company said it will expand its portfolio of higher ticket personal and commercial loans to lower risk and high credit-worthy customers, expecting “good demand” for loans of more than 50,000 rupees.
The development comes as Reserve Bank of India raised risk weightages for banks and non-bank financial companies (NBFCs) by 25 percentage points as it looks to tighten norms for personal loans and credit cards, in turn raising the risk of slow loan growth.
Paytm, which currently has seven non bank finance companies (NBFC) as partners for lending, said it was in the process of adding one banking partners and two NBFC partners.
Loan distributed for the company during the September quarter more-than-doubled in value to 162.11 billion rupees ($1.95 billion), while its financial services revenue, which includes their loans business rose 64%.
