MUMBAI: In FY25, fintech companies that facilitated unsecured lending through digital platforms faced a downturn. Paytm’s unsecured loan disbursals dropped by 19 per cent in Q4 FY25, from Rs1,746 crore in Q3 to Rs1,422 crore in Q4.
This decline led to a modest 9.7 per cent year-on-year growth in financial services revenue, reaching Rs1,688 crore .
MobiKwik reported a consolidated net loss of Rs56 crore in Q4 FY25, a significant increase from Rs0.6 crore in the same period the previous year, despite a 203 per cent surge in Gross Merchandise Value .
The company’s lending product, ZIP, was discontinued due to regulatory constraints, with a shift towards longer-tenure ZIP EMI loans anticipated to aid recovery in the latter half of the year.
Paisabazaar, part of PB Fintech, also experienced revenue pressures as banks and NBFCs became more cautious in the unsecured lending segment
The Reserve Bank of India (RBI) has implemented stricter guidelines on unsecured lending, increasing risk weights for personal loans and credit card exposures. This move aims to mitigate potential risks associated with rapid growth in unsecured lending.
The RBI’s actions have led to a more cautious approach from traditional lenders, affecting the volume of unsecured loans disbursed through fintech platforms.
Fintech companies, in response, are pivoting towards secured lending products and focusing on their core payment services to stabilize revenues.
Strategic shifts
In light of these challenges, fintech firms are adapting their strategies:
Paytm: Enhancing merchant loan offerings to compensate for the decline in unsecured personal loans.
MobiKwik: Transitioning to longer-tenure EMI products and focusing on secured lending options.
Paisabazaar: Exploring partnerships for secured loan products and diversifying financial service offerings.
The fintech sector’s reliance on unsecured lending has exposed vulnerabilities amid regulatory tightening and risk-averse lending practices.
Companies are now reassessing their business models, emphasising sustainable growth through diversification and compliance with evolving regulatory frameworks.
