Digital lending firms could disburse up to $40 bn over 5 years: Paytm1 min read . Updated: 24 Jul 2020, 07:48 AM IST
- Paytm will be launching its online stock brokerage vertical within the next 2-3 weeks, says Paytm chief Vijay Shekhar Sharma
- Paytm’s approach to lending is to use the existing distribution of deposits across verticals and use as leverage
BENGALURU : Online lending firms could disburse anywhere between $20 billion and $40 billion to borrowers over the next five years in India, said Paytm chief executive officer and founder Vijay Shekhar Sharma. A large portion of this lending volume may come from existing fintech firms which have already established a user base in digital payments, online insurance, and wealth management segments, Sharma added.
India’s financial and banking segment at present has the capacity to lend up to $2 trillion in the next five years, of which $1 trillion in loans disbursals could happen in the next three years alone, Sharma said at the Global Fintech Fest 2020.
Paytm has close to 45 million active payments bank accounts with large deposits and transaction rates, Sharma said. All these deposits represent transactional data connected to each user that can be used to lend to the same user in the future, the Paytm chief said.
“Our approach to lending is to use the existing distribution of cash deposits we already have across our payments bank, insurance, and mutual fund segments and use it as leverage," Sharma said at the virtual conference.
Paytm, which is owned by One 97 Communications Ltd. along with its founder Sharma, recently announced the acquisition of Mumbai-based private sector general insurer Raheja QBE for ₹568 crore. This acquisition is part of Paytm’s strategy to diversify its business into segments beyond its core payments and wallet verticals.
Paytm is also in the process of launching its online stock brokerage vertical within the next 2-3 weeks as it looks to take on existing players such as Zerodha and 5paise, Sharma said.
The retail investment category in India is yet to see large penetration with just around 4 crore investors at present, and an opportunity to touch 10 crore over the next few years.
Paytm already operates a financial services subsidiary named Paytm Money, which aims to offer full-stack investment features on its app, including mutual funds, debt and equity funds, and also online stock brokerage.
Apart from financial services and payments, Sharma pointed out that Indian fintechs are yet to disrupt the money transfer segment.
“Digital payments have moved from net banking to card payments, to wallets, and now UPI with virtual addresses. However, forex transfers still hugely rely on bank accounts and net baking and so there is a large space for payments startups to disrupt this," said Sharma.