PhonePe pivots to lending, ramps merchant loans to 2,000cr monthly
Business
PhonePe is switching gears, focusing more on lending after hitting a wall with monetizing UPI payments.
They have ramped up their monthly loan disbursal to ₹2,000 crore, mostly targeting merchants.
Merchant lending has jumped to a yearly run rate of ₹14,000 crore from just ₹4,500 crore in FY25.
PhonePe partners with 56 lenders
Instead of lending directly, PhonePe teams up with 56 lenders to distribute loans and keep risks low.
Even though they own over 45% of India's UPI market, revenue growth has been slow due to lack of merchant fees on UPI transactions.
Net losses have widened thanks to heavy investments in insurance and wealth management.
With IPO plans back on the table, expanding lending could be key for boosting revenue and attracting investors.