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Time of India
29-05-2025
- Business
- Time of India
Buy-now-pay-later offerings wane as fintechs pivot to EMI loans, consumer credit
Buy now, pay later (BNPL) services, which became a hot trend in consumer fintech a few years ago, are falling out of favour. What began as a way to let millions of Indians without credit cards access instant, short-term loans has come under pressure due to regulatory tightening and rising concerns over credit quality. Now, most of the large fintechs are either shutting down BNPL offerings or transitioning to equated monthly instalment (EMI)-based lending to stay compliant and manage risks, people in the know told ET. ETtech Prosus-backed PayU, which operates non-banking finance company PayU Finance , has migrated its BNPL platform LazyPay into a KYC (know your customer)-compliant EMI checkout solution, according to the sources. The company has phased out the earlier BNPL model where customers could split payments without undergoing intensive KYC checks. 'Fintechs are finding that instalment financing is still viable, but only through a regulated, KYC-compliant setup,' said a senior executive at a large fintech company, requesting not to be named. 'The shift is forcing many players to abandon pure-play BNPL and embrace structured EMI lending.' Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Market exits accelerate The pivot follows the complete shutdown of Paytm Postpaid , its BNPL offering, earlier this year. Around the same time, Mobikwik said in its FY25 earnings disclosure that it had discontinued Zip Loans, its BNPL product. At its peak in the September 2023 quarter, Paytm disbursed about Rs 9,000 crore worth of postpaid loans. In comparison, Mobikwik's Zip Loans disbursals stood at Rs 1,000 crore in the September 2024 quarter. Both companies are now focused on transitioning BNPL users to longer-tenure EMI products, which allow for more structured repayment and clearer risk management for lenders. A typical BNPL product earlier allowed users to club multiple purchases and repay in 15–30 days, often with little documentation. These models have now largely disappeared from the market. One of the few remaining major players in this space is Simpl , which has avoided regulatory entanglements by staying outside the formal lending ecosystem. 'We're not offering loans to our customers. We're fighting cash-on-delivery in ecommerce, food delivery and quick commerce by building a model of trust around payments and delivery of products,' said Nityanand Sharma, founder of Simpl. The startup does not partner with regulated entities, allowing it to sidestep direct RBI scrutiny. Sharma said most competitors used BNPL to acquire customers and cross-sell credit, which triggered regulatory pushback. Lenders play it safe The tightening credit environment isn't just a fintech story. Banks and NBFCs, which were the backbone of many BNPL offerings, have pulled back from the space as macroeconomic risks mount and unsecured lending portfolios swell. Also Read: Listed fintechs feel the pinch of lenders going slow on unsecured lending 'In view of elevated household leverage, we are cautious in ramping up this (BNPL) book. We've tightened onboarding norms and will review periodically,' said B Ramesh Babu, CEO of Karur Vysya Bank , on a recent analyst call. The bank, which partners with Amazon for its BNPL programme, had a book of Rs 844 crore at the end of FY25. Amazon itself signalled a shift earlier this year by announcing the $200-million acquisition of Axio , its BNPL fintech partner, indicating a desire to internalise credit capabilities. A senior banker working with multiple fintech platforms said, 'In this macro-financial environment, banks are becoming more risk-averse. We're focusing on affluent customers and aim to grow our unsecured book by about 25% year-on-year, but with tight controls.' Bigger story still intact Despite the pullback, industry insiders believe the larger narrative of unsecured consumer credit growth in India remains intact. What's changing is the form and structure. Rather than short-term, low-ticket loans with lax underwriting, the focus is shifting to EMI-based products with robust risk management, longer tenures and full KYC compliance. Many fintechs are now building checkout EMI infrastructure that mimics traditional consumer durable financing but with a digital-first interface. These products can integrate directly with ecommerce platforms and offer 3–12 month payment options, backed by formal lenders. The transformation also aligns with the Reserve Bank of India 's broader agenda to bring fintech lending under tighter regulatory oversight. ET had reported on May 27 that the RBI has clamped down on default loss guarantee (DLG) structures and instructed lenders to avoid overexposure to risky, thin-file consumers. End of pure-play BNPL 'Pure-play BNPL without proper credit assessment or regulatory partnership is effectively dead,' said a fintech founder, who has pivoted to EMI loans . 'What's emerging is a more sustainable, compliant version of embedded finance.' For now, BNPL's rapid rise appears to have hit a regulatory and risk ceiling. The next phase of growth in India's consumer credit story could be more measured, regulated, and tenure-driven.
Yahoo
05-04-2025
- Business
- Yahoo
DT Midstream (NYSE:DTM) Has More To Do To Multiply In Value Going Forward
Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. In light of that, when we looked at DT Midstream (NYSE:DTM) and its ROCE trend, we weren't exactly thrilled. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on DT Midstream is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.051 = US$489m ÷ (US$9.9b - US$426m) (Based on the trailing twelve months to December 2024). Therefore, DT Midstream has an ROCE of 5.1%. In absolute terms, that's a low return and it also under-performs the Oil and Gas industry average of 10%. Check out our latest analysis for DT Midstream Above you can see how the current ROCE for DT Midstream compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for DT Midstream . There are better returns on capital out there than what we're seeing at DT Midstream. The company has employed 117% more capital in the last five years, and the returns on that capital have remained stable at 5.1%. Given the company has increased the amount of capital employed, it appears the investments that have been made simply don't provide a high return on capital. One more thing to note, even though ROCE has remained relatively flat over the last five years, the reduction in current liabilities to 4.3% of total assets, is good to see from a business owner's perspective. Effectively suppliers now fund less of the business, which can lower some elements of risk. As we've seen above, DT Midstream's returns on capital haven't increased but it is reinvesting in the business. Although the market must be expecting these trends to improve because the stock has gained 79% over the last three years. But if the trajectory of these underlying trends continue, we think the likelihood of it being a multi-bagger from here isn't high. On a separate note, we've found 2 warning signs for DT Midstream you'll probably want to know about. If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
24-02-2025
- Business
- Yahoo
Procter & Gamble's (NYSE:PG) Returns Have Hit A Wall
Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So when we looked at Procter & Gamble (NYSE:PG), they do have a high ROCE, but we weren't exactly elated from how returns are trending. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for Procter & Gamble: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.24 = US$21b ÷ (US$123b - US$34b) (Based on the trailing twelve months to December 2024). So, Procter & Gamble has an ROCE of 24%. That's a fantastic return and not only that, it outpaces the average of 18% earned by companies in a similar industry. See our latest analysis for Procter & Gamble In the above chart we have measured Procter & Gamble's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Procter & Gamble . Things have been pretty stable at Procter & Gamble, with its capital employed and returns on that capital staying somewhat the same for the last five years. This tells us the company isn't reinvesting in itself, so it's plausible that it's past the growth phase. So it may not be a multi-bagger in the making, but given the decent 24% return on capital, it'd be difficult to find fault with the business's current operations. With fewer investment opportunities, it makes sense that Procter & Gamble has been paying out a decent 55% of its earnings to shareholders. Unless businesses have highly compelling growth opportunities, they'll typically return some money to shareholders. In summary, Procter & Gamble isn't compounding its earnings but is generating decent returns on the same amount of capital employed. Although the market must be expecting these trends to improve because the stock has gained 61% over the last five years. But if the trajectory of these underlying trends continue, we think the likelihood of it being a multi-bagger from here isn't high. If you want to continue researching Procter & Gamble, you might be interested to know about the 1 warning sign that our analysis has discovered. Procter & Gamble is not the only stock earning high returns. If you'd like to see more, check out our free list of companies earning high returns on equity with solid fundamentals. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
