Walmart-Backed PhonePe Entry into Consumer Lending

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Three points you will get to know in this article:

  • PhonePe to roll out consumer lending services by January 2024
  • Company to start as a distributor for personal loans in partnership with five lenders
  • PhonePe aims to monetize its user base and replicate the success achieved in insurance distribution with credit offerings

PhonePe, the digital payments unicorn, is poised to launch consumer lending services on its platform by January of the upcoming year. In a strategic move into the consumer lending arena, PhonePe, backed by Walmart, is set to commence operations initially as a facilitator for personal loans. According to a report from ET, the fintech firm is in the final stages of integration with five lenders, encompassing both traditional banks and non-banking finance companies.

Expanding Credit Offerings

Over the next six to seven months, PhonePe aims to unveil a diverse array of consumer credit products. The company has been diligently enhancing its underwriting capabilities to assess whether customers align with the lender’s criteria. Sources cited in the report indicate that the introduction of these offerings to consumers will be a gradual process. Exploring potential credit line offerings in the upcoming year, PhonePe currently sees it as a secondary focus for now.

PhonePe is also focusing on maximizing the value from its user base and leveraging its extensive distribution capabilities, particularly in the realm of insurance. In the realm of credit, our goal is to emulate the triumphs we’ve experienced in distributing insurance. PhonePe has solidified its role as a go-to platform for a variety of insurance products, spanning life, health, motor, and car insurance. Teaming up with partners like Acko and more, our app simplifies the process for users to handle their monthly subscription payments through the Unified Payments Interface (UPI).

Earlier this year, PhonePe announced its venture into the world of merchant lending. The fintech powerhouse proudly unveiled a marketplace dedicated to merchant lending, allowing banks and NBFCs to extend credit to its vast base of 35 million merchants.

Diversifying Product Offerings and Achieving Financial Growth

The platform has been on an exciting journey of diversifying its product offerings, introducing innovations such as the Indus Appstore Developer Platform. This developer-friendly platform empowers Android app developers to compete with industry giants like Apple and Google. The Indus Appstore, a mobile app marketplace, welcomes developers to effortlessly upload their apps using its user-friendly developer platform.

In a remarkable financial performance, PhonePe recorded a revenue of INR 2,914 Crores in the fiscal year concluding on March 31, 2023—a substantial 77% surge from the INR 1,646 Crores in FY22. In a statement, the startup attributed this impressive revenue growth to the increasing popularity of services such as money transfers, mobile recharges, and bill payments.

PhonePe, a major digital payments unicorn, is set to commence consumer lending services by January. Initially, it will act as a distributor for personal loans through integration with five lenders. Over the next six to seven months, it plans to introduce various consumer credit products, with a potential credit line offering in the future. The company aims to monetize its user base and distribution capabilities, emulating its success in insurance distribution. Additionally, PhonePe entered the merchant lending space and diversified its offerings, achieving a revenue of INR 2,914 Cr in FY23.

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