Paytm’s lending business (merchant loans) along with Paytm Postpaid, the company’s buy-now-pay later product, is off to a great start. The company’s DRHP reveals that it has disbursed 1.4 million loans in Q4FY21, almost 100 times higher than the number of loans (13,000) disbursed during Q3FY21.

In Q3FY20, the company disbursed 13,000 loans, Q4FY20 it did 26,000 loans, 23,000 in Q1FY21, and then saw a jump to 349,000 in Q2FY21, 881,000 in Q3FY21 and closed Q4FY21 with 1.381 million loans.

The company in its DRHP said that its users can avail a transaction credit facility for a wide range of products and services at more than 0.5 million shops, apps and websites. The Paytm Postpaid service has a credit limit of up to ₹60,000 for a maximum of 30 days, offered in partnership with two leading non-banking financial companies in India with an instant credit limit for various payments to Paytm app users.

The Postpaid feature helps users break down their spends into EMIs, thus not worrying about upsetting their monthly budgets.

Paytm’s Buy Now, Pay Later facility helps users take care of their daily payment needs, including bill payments and commerce. “Users can use Paytm Postpaid at a large cross-section of retail in India, from daily purchases of groceries, milk, and other home essentials from neighbourhood stores, to high value shopping at popular retail destinations,” the company said in its DRHP.

The company has also mentioned the lending vertical as one of its key focus areas in its DRHP. The company said, “key strategic focus for us is to scale up our consumer and merchant lending businesses, including Paytm Postpaid (buy-now-pay-later), in collaboration with our financial partners, as well as our wealth management offerings."

This comes on the heels of analysts expecting credit tech to lead the next phase of growth for Paytm. “We expect Paytm’s revenue base to double by FY23 to $1 billion, with non-payments revenue contributing 33%, led by credit tech,” said a report by Bernstein analysis.

For Paytm, the promise of BNPL is high as it will be able to leverage its existing 300 million user base. “Paytm Credit Tech has started to make strong progress in building a revolving credit product (a 1 month credit limit) on its app, that users can spend within its ecosystem and across the UPI universe,” said the Bernstein report.

Recently, the company had also launched an extension of its Buy Now, Pay Later product with Paytm Postpaid Mini, which enables loans as small as ₹250 for users.

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