Paytm is reportedly trying to enter the lending space and is seeking a licence from the Reserve Bank of India (RBI) to become a peer-to-peer lending platform.
The development, first reported by the Economic Times was sourced from filings made by the One97 Communications (Paytm’s parent company) at the Ministry of Corporate Affairs, the company moved a board resolution on February 7 saying it intends to “carry on the business of non-banking financial company — peer-to-peer”.
ET reports that the company could have also applied for a licence to the central bank and it could already be under consideration. This though could not be verified as RBI is yet to release the names of the entities which NBFC P2P category and is said to have received multiple applications.
Though the company’s exact plans around peer-to-peer lending could not be determined, its filings to the ministry said, “To carry on the business of NBFC-P2P lending platform as an intermediary to provide the services of loan facilitation via web or app medium or otherwise…”
Sources close to the company told ET that Paytm is trying to leverage the seven-million-strong offline merchant base it has garnered and is already giving out small-value short-term loans to them. Since the company does not have a lending licence it is doing it through NBFC partners.
Paytm’s other recent splashes
The RBI’s new KYC norms have led to a dip in the usage of mobile wallets and have had an impact on the company’s core service. This may turn out to be a driving factor in Paytm diversifying its business into the personal finance space.
Paytm Money, the payments company’s wealth management arm is set to begin operations as soon as the company receives approval from the Securities and Exchange Board of India (SEBI). It was reported that One97 Communications, Paytm’s parent company, will invest $10 million upfront in the newly created wealth management arm.
Last month it was reported that Paytm was closer to offering insurance products on its platform, as its parent One97 Communication Ltd has set up two insurance units: Paytm Life Insurance Ltd and Paytm General Insurance Corporation Ltd. The development was found in the company’s ministry of corporate affairs’ filings. According to the filings, the company’s founder Vijay Shekhar Sharma, and senior executives Shankar Nath and Madhur Deora will be the directors of these units.
In a separate development, the company is reportedly also launching a credit scoring product, Paytm Score, which will find out user’s credit score based on their transactions and payment behaviour. This move is in line with its interest in credit or loan segment.