Chennai-based fintech IppoPay is finding its lending arm outgrowing its payments business, driven by demand from kirana stores and neighbourhood shops with monthly turnovers under Rs 2 lakh.
The firm has disbursed about Rs 120 crore over 24 months, issued 7,000 and more unsecured working-capital loans, and completed nine loan cycles, with monthly disbursements growing over 10% month-on-month, founder Mohan K told Moneycontrol in an interaction.
Its annualised run-rate of disbursement stands at nearly Rs 250 crore till date.
Lending is becoming a core business
“It isn’t a diversification, it’s a natural extension of what we already do for the merchant ecosystem we serve,” Mohan told Moneycontrol.
“For our segment, credit is a way of life, and any serious payments platform has to solve for access to credit in a seamless, contextual way.”
Lending, he said, was central to building “stickiness,” and “we’re among the few players positioned to offer unsecured, contextual working-capital loans to micro-entrepreneurs. The strength of our repayment engine has made us an attractive partner for multiple lenders, our loss rate has stayed consistently below 0.8% across ten loan cycles.”
Addressing risk in a low turnover segment, Mohan said, “We’ve always viewed this as a collection-first business, not a disbursement-first one. Our Contextual Collection Orchestration engine designs repayment flows based on each merchant’s risk profile,"
This structure ensures rapid recycling of capital and extremely tight risk control, reflected in our sub-0.8% loss rates across all cohorts.
Broader shift: payments fintechs embracing lending
IppoPay is not alone. Several payments platforms in India are moving into lending as UPI transaction margins remain thin.
PhonePe launched lending services for merchants, facilitating over 20,000 loans since May 2023, and recently rolled out secured loans in categories such as gold, vehicle, home, education etc., via partnerships with NBFCs.
Razorpay has long had an SME lending vertical (Razorpay Capital) and recently acquired risk-tech start-up TERA Finlabs to strengthen underwriting.
It has also launched solutions such as RazorpayX Digital Lending 2.0 to enable fintechs/NBFCs to scale lending more compliantly.
These moves indicate a pattern where payment fintechs are gradually transforming into financial ecosystems with lending as a core pillar.
Also Read: Neobanks diversify into cards, payments, investment businesses amid struggle to offer core banking services
Mohan also said that IppoPay’s future offerings will go beyond credit.
“Our merchants face three persistent gaps in their financial lives: Credit, insurance, investments, and more...Our product roadmap is consciously evolving to plug these gaps and build a lifecycle-led financial stack for this segment," he added.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
