Phonepe: PhonPe app may offer personal loans in 2024: What it means for users

Popular digital payments platform PhonePe may start offering consumer lending products by January 2024. It is important to note that the Walmart-backed company will be working as a distributor for personal loans. The company is working on its credit underwritingtools (which evaluate an individual’s creditworthiness before issuing them a loan) and is in the final stages of integration with five lenders.These lenders include both banks and non-banking finance companies (NBFCs).
According to a report by the Economic Times, two people (who requested to be anonymous) aware of the discussions have revealed PhonePe’s plans.
One of them said, “PhonePe is expected to have multiple consumer (credit) products over the next six to seven months. It has been working to build its underwriting capabilities to figure out which customers will fit the lender’s criteria and will open the offering slowly to consumers.”
The second person said: “The push internally now is to monetise its user base and leverage its distribution heft. With credit, it is trying to replicate the success it has had on the insurance distribution side.”

Recently, PhonePe reported a registered user base of 500 million customers as well as 37 million merchants. The company was also reportedly in the final stages of partnering with Axis Bank. With this partnership, PhonePe will distribute the bank’s credit card offerings.
Meanwhile, another source noted that the company may launch a credit line offering over the next year, but it isn’t an immediate priority.
Other services offered by PhonePe
In July, the company noted that overall it has sold 56 lakh (or 5.6 million) policies. PhonePe distributes life, health, motor and car insurance with partners such as Acko and others. The platform also allows users to pay in monthly subscriptions through UPI. Earlier this year, PhonePe started merchant lending and is currently offering loans of up to Rs 5 lakhs to its merchant users.