PhonePe Disburses ₹3.6 Billion Monthly in Merchant Loans

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PhonePe Lending CEO Hemant Gala recently shared insights on the company’s lending operations, highlighting its significant growth and expansion plans. According to Gala, PhonePe is disbursing approximately ₹300 crore worth of merchant loans every month, with an annualized target of ₹3,600 crore for the 2024-25 financial year.

Merchant loans on the PhonePe platform typically range from ₹60,000 to ₹5 lakh, with an average loan amount of ₹1.5 lakhs. Gala mentioned that the company has already disbursed over two lakh loans to its merchants, with a gradual scale-up in lending activity. The platform focuses on catering to the needs of micro, small, and medium-sized enterprises (MSMEs), offering a diverse range of loan products.

PhonePe operates three lines of businesses in lending: merchant lending, unsecured personal loans, and secured loans, which were introduced last month. The fintech company has partnered with a network of non-banking financial companies (NBFCs) to offer secured lending products, including loans against mutual funds, property, gold, home loans, two-wheeler loans, and four-wheeler loans. Gala confirmed that banks will also join the platform within the next 30 days.

PhonePe has been actively involved in lending for the past year, investing heavily in the business. The company leverages its two-sided network of over 535 million registered users and 39 million merchants to cater to the financial needs of both segments. Gala believes that digitization will help reduce the cost of acquisition for PhonePe’s lending operations.

Regarding the commission charged to NBFCs and banking partners, Gala explained that it varies depending on the product category. In some cases, the commission is fixed, while in others it is a percentage of the disbursement amount. This mix of both fixed and percentage-based commissions allows PhonePe to adapt to different product categories and optimize its revenue streams.

Overall, PhonePe’s lending operations are poised for significant growth, driven by its robust platform, diverse loan offerings, and strategic partnerships with NBFCs and banks.