Indian digital payment company Paytm said on Wednesday that it will reduce the number of small loans below 50,000 rupees (approximately US$600.14). The move comes weeks after the Reserve Bank of India tightened rules on consumer lending following a surge in demand.
Paytm President and COO Bhavesh Gupta said in a call with analysts that the move will lead to a nearly 40% to 50% drop in loan volume for the platform's postpaid products. He also added that the impact on Paytm's revenue growth will be minimal.
The company said it will offer a larger portfolio of high-ticket personal and business loans to customers with lower risk and higher creditworthiness, and it expects demand from its customers for loans above Rs 50,000 to remain good.
Earlier, the Reserve Bank of India raised the risk weight of banks and non-banking financial companies (NBFCs) by 25 percentage points in a bid to tighten norms for personal loans and credit cards, which in turn increased the risk of slower loan growth.
Paytm currently has seven NBFCs as its lending partners and the company said they are adding one banking partner and two NBFC partners.
In September this year, the amount of loans issued by the company more than doubled year-on-year to 162.11 billion rupees (approximately US$1.95 billion), and financial services revenue, including loan business, increased by 64% year-on-year.