Expanding into Physical Locations, Paisabazaar Aims to Increase Secured Lending

Nitin Konde, Varun Bhardwaj

Oct 17, 2024 — 2 min read

Paisabazaar Expands into Physical Locations

Listed PB Fintech subsidiary Paisabazaar, a digital credit marketplace, replicates sister company Policybazaar by creating a physical distribution channel of its own.

In India, Paisabazaar is among the biggest platforms for credit transactions. Through online channels, it gives customers access to credit cards, unsecured personal loans, and other comparable products from banks and non-bank lenders. In order to facilitate the execution of such loan delivery, Paisabazaar hopes to establish a physical presence as it expands its secured credit distribution strategy.

The chief executive officer of Paisabazaar, Naveen Kukreja, told a media outlet that the company has assembled a field team of over 100 employees in Delhi, Mumbai, and Bengaluru with the goal of focusing on secured credit products, including home loans and loans backed by real estate. Although they are still in the beta phases, it is also evaluating other products, such as loans secured by securities and automobiles. It plans to expand this team to 500 members by the end of the current fiscal year.

Paisabazaar to Enhance Secured Credit

In the near future, Paisabazaar hopes to raise the percentage of secured credit in its total disbursements from 15% of the previous fiscal year to 50%. It has already increased to 33% of all disbursals in the last several months.

The company used to offer home financing as well, although customers had to check on its platform and usually closed the deal through the builders, the bank branch, or the real estate agent. With a physical presence now, the company intends to close that service delivery gap, according to Kukreja.

This change in approach coincides with a moderation in Paisabazaar's disbursals, which are essential to the company's ability to generate income. In response to regulatory mandates, the broader ecosystem is moving towards secured products, and Paisabazaar is attempting to take a piece of that market.

Quarterly Report

Paisabazaar disbursed over 130,000 credit cards and INR 3,140 crore in loans in the first quarter of FY25. It had disbursed 140,000 credit cards and INR 3,542 crore in loans in the quarter that ended on June 30 of the previous year.

Every institution develops a portfolio of both secured and unsecured assets as it expands. "We ultimately changed our approach six months ago when the RBI tightened the guidelines for unsecured credit," according to Kukreja.

Although Paisabazaar hopes to reach 50% of its disbursal volume with secured credit, the lower take rates, or fees, on secured loans mean that revenue profits will be lower. However, Kukreja stated that eventually, the business hopes to collaborate with lenders to develop products that will enable it to obtain residual income from its clientele.

Expanding upon its broader financial services offering, Kukreja seeks to provide clients with a comprehensive financial wealth management choice by utilising account aggregator data and deep interfaces with several financial services platforms.