Paytm, MobiKwik, Paisabazaar Pivot as Unsecured Lending Slows Down

India’s listed fintech firms are facing headwinds as banks and NBFCs scale back on unsecured lending. Companies like Paytm, MobiKwik, and Paisabazaar are now adapting to the changing environment by focusing more on secured lending and core payment services.

This shift comes amid regulatory pressure and rising caution around credit risk, as per Economic Times report.

Lending Cools Down

A noticeable slowdown in the disbursal of unsecured loans by banks and non-banking finance companies (NBFCs) is reshaping the revenue outlook for India’s listed fintech firms.

Once buoyed by rapid growth in personal loans and digital lending, companies like Paytm, MobiKwik, and Paisabazaar are now grappling with reduced volumes and shrinking contribution from their financial services segments, as per the news report.

Fintech companies like Paytm, MobiKwik, and Paisabazaar used to help banks and NBFCs (non-banking financial companies) distribute unsecured consumer loans, loans that don’t require collateral, such as personal loans or credit lines, through their digital platforms.

However, in FY2025, the volume of these unsecured loans slowed down because lenders became more cautious.

For instance, One 97 Communications, which operates Paytm, saw its unsecured loan disbursals drop 19% quarter-on-quarter to ₹1,422 crore in Q4 FY25. Despite efforts to shift focus toward merchant lending, revenue growth from its financial services arm was relatively muted, rising just 9.7% in FY25 compared to a much stronger 48% jump the previous year.

Shifting Focus to Secured Lending

In response, these fintechs are turning to secured lending and reinforcing their core payments businesses.

The rationale: mitigate risk, meet regulatory expectations, and sustain cash flows. MobiKwik, for example, discontinued its BNPL (Buy Now Pay Later) product, Zip Loan, and has started pushing EMI-based credit models like Zip EMI. However, total disbursals still fell 41% year-on-year.

MobiKwik's revenue from financial services declined from ₹558 crore in FY24 to ₹402 crore in FY25, even as the company managed to increase its share of revenue from loan disbursals through improved terms with its partner lenders.

Regulatory Pressure and Risk Aversion

Industry experts attribute the lending pullback to a mix of cautious outlook from financial institutions and regulatory nudges from the Reserve Bank of India (RBI). A key driver has been the implementation of the Digital Lending Guidelines (DLG), which pushes lenders to rely more on their internal underwriting processes and less on third-party fintech assessments.

This also comes from the RBI’s nudge to FIs to depend on their own underwriting and less on underwriting by their partner fintechs.

The outcome? Fintechs are increasingly being limited to being tech enablers and sourcing partners, rather than full-stack lending players.

Paisabazaar Also Hit

The trend hasn’t spared credit marketplaces either. Paisabazaar, run by PB Fintech, saw a dip in the number of credit cards sourced, from 583,000 in FY24 to 517,000 in FY25. The platform also reported a 2% decline in unsecured lending volumes in the December quarter, following 7% growth in the previous quarter.

These numbers suggest an inflection point for consumer credit platforms, which must now reevaluate their growth strategies amid slower loan origination and tighter oversight.

Read More: RBI Likely to Tighten Dividend Rules for Banks: Focus on Capital Strength, Long-Term Value.

Conclusion

While large NBFCs are expected to continue growing across lending segments in FY26, unsecured lending is likely to remain under pressure. For fintechs, this means an ongoing pivot towards secured products, partnerships that emphasise compliance, and deeper integration with traditional lenders' systems.

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