Merchant loans worth ₹300 cr getting disbursed via PhonePe app every month

PhonePe Lending chief executive officer Hemant Gala says the PhonePe platform is disbursing about ₹300 crore worth of merchant loans every month.

The digital payments firm expects ₹3,600 crore worth of disbursements in 2024-25 on an annualised basis.

Merchant loans typically range from ₹60,000 to ₹5 lakh and the average loan amount is ₹1.5 lakhs, says Gala.

“We have disbursed upward of about two lakh loans to our merchants. And it's seeing a gradual scale up, looking at the kind of nature of merchants that we have,” says Gala, adding that it's a good mix of MSMEs.

On the lending side, PhonePe runs three lines of businesses - merchant lending, unsecured personal loans, and secured loans which the company introduced last month.

PhonePe launched secured lending products on its platform by partnering with a network of non-banking financial companies (NBFCs). Gala says banks will also join the platform in the next 30 days. The fintech offers loan against mutual funds, loan against property, loan against gold, home loans, two-wheeler loans and four-wheeler loans.

“We have been lending for the past one year. We've been strongly invested in this business. There are two-sided networks that we have – over 535 million registered users and 39 million merchants. The idea in financial services and within that in lending was to cater to the needs of both the segments,” says Gala.

Gala says digitisation is likely to help bring down the cost of acquisition for PhonePe’s lending.

On the commission charged to NBFCs and banking partners by PhonePe, Gala says in some product categories it's fixed while in others it's a percentage of the disbursement amount that they are doing. “So it's a mix of both depending on the product categories right now,” he says.