Paisabazaar Building Offline Distribution Channel To Fuel Secured Lending Play

PB Fintech-owned insurtech platform Paisabazaar is reportedly looking to double down on its secured lending portfolio by building its own offline distribution channel.

As per ET, citing Paisabazaar’s CEO Naveen Kukreja, the company has already deployed a field team of around 100 people in Delhi, Mumbai and Bengaluru, targeting secured credit products like home loans and loans against property. 

It aims to expand the on-field team to 500 by this fiscal year. 

The report added that products like loans against cars and securities are also being run in beta stages to consolidate its secured credit offering. 

This move forms a larger part of Paisabazaar’s efforts to increase the secured credit share in the company to 50% in the near term from 15% last fiscal. 

“We had home loans in the past too, but consumers would check on our platform and typically would close the deal through their builders or bank branch or through the property dealer. Now with a physical presence, we hope to plug that gap in our service delivery,” Kukreja was quoted as saying in the report.

This focus on secured lending further coincides with Paisabazaar witnessing a moderation in its disbursals, which is core to its revenue generation.

For Q1 of FY25, it distributed  INR 3,140 Cr in loans alongside issuing around 1,30,000 credit cards against the disbursal of INR 3,542 Cr in loans and  140,000 credit cards. 

“Any institution as it grows builds a portfolio balance of secured and unsecured assets. Six months back when the RBI tightened the rules for unsecured credit, we also finally shifted our strategy,” Kukreja added.

This comes at the heart of regulatory authorities aiming to enhance the security and compliance in India’s lending ecosystem. 

Earlier this year, the Reserve Bank of India RBI updated Know Your Customer (KYC) norms with stricter adherence. This further provides a safeguard against money laundering. 

Last year, RBI decided to increase the risk weighting on unsecured lending from 100 per cent to 125 per cent. Despite this, unsecured credit in India’s overall loan portfolio remained elevated. 

Data released by RBI in February outlined that credit card transaction value has surged to Rs 1.66 trillion in January 2024 from Rs 1.61 trillion in November 2023.