Paisabazaar Boosts Secured Lending Through New Offline Distribution Channel

PB Fintech's insurtech platform, Paisabazaar, is reportedly intensifying its efforts in the secured lending market by establishing its own offline distribution channel. According to a report from a news agency, CEO Naveen Kukreja has revealed that the company has initiated this strategy by deploying a field team of approximately 100 members across major cities, including Delhi, Mumbai, and Bengaluru. This team is specifically targeting secured credit products such as home loans and loans against property.

Ambitious Expansion Plans

Paisabazaar aims to scale its on-field team to 500 members by the end of the current fiscal year. Additionally, the company is experimenting with beta versions of other secured lending products, including loans against cars and securities, to broaden its secured credit offerings. This initiative is part of a broader strategy to increase the share of secured credit in Paisabazaar’s portfolio from the current 15% to 50% in the near future.

Filling Service Gaps with Physical Presence

“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,” Paisabazaar CEO Naveen Kukreja was quoted as saying. This statement reflects the company's commitment to enhancing customer experience by bridging the service gap created by a lack of offline support.

Response to Disbursement Moderation

This strategic pivot toward secured lending coincides with a noted moderation in Paisabazaar's disbursal activities, which are vital for revenue generation. In the first quarter of FY25, the platform distributed INR 3,140 crore in loans and issued approximately 130,000 credit cards, compared to the previous quarter, which saw disbursements totaling INR 3,542 crore and the issuance of 140,000 credit cards.

Adapting to Regulatory Changes

"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 strategic adjustment aligns with the broader regulatory environment in India, where authorities are focusing on enhancing security and compliance in the lending ecosystem.

Earlier this year, the Reserve Bank of India (RBI) updated its Know Your Customer (KYC) norms, enforcing stricter adherence to safeguard against money laundering. Additionally, the RBI raised the risk weighting on unsecured lending from 100% to 125%, further tightening regulations. Despite these measures, the share of unsecured credit in India's overall loan portfolio remains notably high.

Data released by the RBI in February indicated that the total value of credit card transactions surged to INR 1.66 trillion in January 2024, up from INR 1.61 trillion in November 2023.

About Paisabazaar

Paisabazaar is a prominent financial technology platform based in India, primarily focused on providing a range of financial products and services. Launched in 2014 and owned by PB Fintech, Paisabazaar aims to simplify the borrowing process for consumers and enable them to access a variety of financial solutions. Here’s a closer look at what Paisabazaar offers and its impact on the Indian financial landscape:

Overview of Paisabazaar

1. Core Services:

   • Loans: Paisabazaar offers a wide array of loan products, including personal loans, home loans, car loans, business loans, and loans against property. The platform serves as an aggregator, connecting consumers with multiple lending institutions.

   • Credit Cards: It provides users with options to compare and apply for various credit cards based on their requirements, helping them find suitable offers.

   • Insurance: The platform also features insurance products, including life insurance, health insurance, and motor insurance, allowing users to compare different policies.

   • Investment Products: Paisabazaar offers investment solutions, enabling customers to explore mutual funds and other investment avenues.

2. User-Friendly Platform:

   • Paisabazaar is known for its user-friendly interface, making it easy for customers to navigate and apply for financial products online. The platform provides tools for comparing different financial products, assessing eligibility, and checking offers from multiple lenders.

3. Financial Literacy Initiatives:

   • In addition to providing financial products, Paisabazaar is committed to enhancing financial literacy among consumers. The platform offers resources and articles that educate users about various financial topics, helping them make informed decisions.

4. Market Position:

   • As one of India’s leading fintech platforms, Paisabazaar has gained a significant share in the online lending and insurance markets. Its ability to streamline the borrowing process and provide a range of options has made it a go-to platform for many consumers.

5. Regulatory Compliance:

   • Paisabazaar adheres to the regulatory standards set by the Reserve Bank of India (RBI) and other financial authorities, ensuring a secure and compliant environment for its users.

6. Recent Developments:

   • Paisabazaar has been actively working on expanding its offline distribution channels, aiming to enhance customer service and reach more potential borrowers. The company is also focused on increasing its share of secured lending products, responding to evolving market demands and regulatory changes.

Paisabazaar plays a crucial role in India’s fintech landscape by bridging the gap between consumers and financial institutions. With its commitment to providing diverse financial solutions and promoting financial literacy, Paisabazaar continues to empower individuals to achieve their financial goals. Whether it’s securing a loan, choosing the right credit card, or investing wisely, Paisabazaar serves as a comprehensive platform for managing personal finance in India.

Conclusion

As Paisabazaar invests in building its offline distribution channel, the company aims to solidify its position in the secured lending market while adapting to the evolving regulatory landscape in India's lending ecosystem. This strategic focus on secured lending could prove crucial for its growth as it seeks to enhance its service offerings and customer engagement.