Listed fintechs feel the pinch of lenders going slow on unsecured lending

Time of India

21-05-2025

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A slowdown in unsecured loan disbursals by banks and non-banking finance companies ( NBFCs ) has impacted the financials of listed new-generation fintech firms like Paytm MobiKwik and PB Fintech-run Paisabazaar.These fintechs—which source loans through digital channels for their lending partners—have shifted their focus to secured lending and/or their core payments business to make up for a slowdown in their disbursals of unsecured consumer loans in the financial year 2025.One 97 Communications, which runs Paytm , reported a 19% quarter-on-quarter fall in its unsecured loan disbursals in the March quarter at Rs 1,422 crore from Rs 1,746 crore in the December quarter.While the fintech major made up for this slowdown by sprucing up its merchant loan offerings, its revenue growth from the financial services business was much slower this year, rising 9.7% to Rs 1,688 crore in FY25 from Rs 1,538 crore a year earlier.Between FY22 and FY23, the revenue from this business had grown 48% from Rs 1,034 crore.'Personal loan wise, we are moving more and more towards a pure distribution model where lenders pick up their own collection obligations, so to say,' Vijay Shekhar Sharma, chief executive officer of Paytm, said during the analyst call after its FY25 results.He said the company 'will not see much larger growth' in personal credit 'unless something bigger changes.'Similarly, Gurgaon-based MobiKwik saw its share of revenue from financial services fall 28% to Rs 402 crore in FY25 from Rs 558 crore in the previous fiscal.The startup also stopped its buy-now-pay-later Zip Loan product. Instead, MobiKwik said it is enabling more customers to convert their purchases into EMI payments, through Zip EMI. This resulted in the overall disbursal of such loans falling 41% to Rs 5,358 crore in FY25 compared to Rs 9,093 crore a year back.MobiKwik said its revenue share for loan disbursals went up to 7.5% from 6.4% a year back, driven by better arrangements with its partner lenders.'Large financial institutions (FIs) these days are primarily using fintechs for their tech products which aid in their loan management and processes, and less for loan sourcing by fintechs,' said Siddharth Goel, director, non-banking financial institutions, at Fitch Ratings.'The risk averseness to external underwriting is contributing to that. This also comes from the RBI's nudge to FIs to depend on their own underwriting and less on underwriting by their partner fintechs,' he added.A similar impact has played out for Paisabazaar, which is a credit marketplace . One of its key products, credit cards, have seen a major disbursement slowdown this year . In FY2025, the number of credit cards sourced by the platform stood at 517,000, down from 583,000 in FY2025. The Gurgaon-based company, which is a sister concern of insurance marketplace Policybazaar, said that the unsecured loan business actually shrunk by 2% in the December quarter compared to 7% growth in the September quarter.Banks and NBFCs are offering their partners limited elbow room to innovate, thereby restricting them mostly to being sourcing channels. Fintechs have also been pushed to adopt the Digital Lending Guidelines (DLG) prescribed by the banking regulator, resulting in tightening of their revenue channels.'As for FY26, large NBFCs should continue to grow in various segments though growth rates from unsecured segments will be lower than what were seen in recent years,' Goel of Fitch Ratings said.