Volt Money Partners PhonePe To Offer Loans Against Mutual Funds

Fintech startup Volt Money on Thursday (May 30) announced a strategic partnership with PhonePe to offer loans against mutual funds for the customers of the digital payments giant.

As part of the collaboration, Volt Money will integrate its loan offerings in the PhonePe mobile app and will offer credit in the ticket size ranging between INR 25,000 and INR 5 Cr. The move will enable Volt Money to tap into PhonePe’s user base of 535 Mn to shore up its offerings.

“We are thrilled to partner with PhonePe to provide affordable loans against mutual funds to millions across India. Over the past year, our distribution capacity has grown rapidly and we are now live with 10+ fintech partners… ,” said Volt Money cofounder and chief business officer (CBO) Bharat Lamba.

Commenting on the partnership, Hemant Gala, CEO of lending at PhonePe, added, “We are excited to partner with Volt Money to offer loans against mutual funds through our newly launched secured lending platform…”

Founded in 2022 by Lamba, Lalit Bihani and Ankit Agrawal, Volt Money is a fintech platform that offers loans against mutual fund investments. It also offers both plug-and-play and deep integration capabilities for B2B fintech players to offer embedded finance for their clients.

Last year, Volt Money raised $1.5 Mn in a pre-seed funding round from investors such as Titan Capital, All In Capital, among others. 

The partnership announcement came on the same day as PhonePe announced the launch of secured lending products in partnership with banks, non-banking financial companies (NBFCs) and other fintech startups. 

The development comes at a time when mutual funds have emerged as a potential asset class for secured lending. As a result, the segment is witnessing the entry of a number of new players.

Last year, Jio Financial Services filed for a fresh licence from the Securities and Exchange Board of India (SEBI) to enter the mutual fund space. In the same year, stock trading and investment platform Dhan, floated by Paytm Money’s former chief executive Pravin Jadhav, also launched mutual fund investment services on its platform.

The average assets under management for the Indian mutual fund industry for June 2023 stood at INR 44.82 Lakh Cr, growing more than 5X in 10 years, as per the Association of Mutual Funds in India.

On the other hand, the growing penetration of smartphones and the internet has also fuelled the growing demand for digital lending. The ecosystem has seen new players, looking to quench the credit thirst for digital Indian users. 

On a broader level, the overall digital lending market size is expected to reach $720 Bn by 2030, as per Inc42 analysis.