PhonePe scales lending distribution as it readies next phase of growth
With UPI monetisation limited by zero MDR, PhonePe is expanding lending, wealth and insurance ahead of a planned IPO. The platform is facilitating about ₹2,000 crore in monthly loan disbursals through 56 lending partners and has applied for an NBFC licence.
What happened
PhonePe is scaling loan distribution ahead of a planned IPO, facilitating about ₹2,000 crore in monthly disbursals. With UPI monetisation constrained by zero
Key facts
- ₹2,000 crore monthly loan disbursals
- ₹14,000 crore annualised merchant-loan disbursal run rate
- ₹4,500 crore merchant loans arranged in FY25
- 56 lending partners
- FY26 consolidated revenue: ₹7,920 crore, up 11%
- FY26 net loss: ₹2,792 crore, up 62%
- Over 45% share of India's UPI market
- FY26 second-half adjusted operating revenue: about ₹3,746 crore
- FY26 first-half adjusted operating revenue: ₹3,162 crore
Why this matters
Banks, NBFCs and insurers should view PhonePe as an increasingly powerful distribution partner—or competitor—and assess partnerships that secure access to its large, transaction-rich user base.
What to watch
- RBI decision on PhonePe's NBFC licence application and any conditions attached to approval.
- Monthly loan disbursal growth above or below the reported roughly ₹2,000 crore run rate.
- Growth in the number and quality of lending partners, including major banks and large NBFCs.
- Disclosure of take rates, revenue contribution, approval rates, repeat borrowing and customer-acquisition costs for credit products.
- Any reported delinquency, fraud, mis-selling, collections or digital-lending compliance issues among platform partners.
- Changes to UPI monetisation policy, MDR rules or incentives that alter the urgency of diversification.
- IPO filing disclosures on fintech revenue mix, profitability, lending exposure and regulated-entity structure.
- Deepen embedded credit offers for merchants, consumers and small businesses using payment-flow signals and lender-specific eligibility journeys.
- Add secured and higher-ticket products such as gold loans, vehicle finance, working-capital credit and loan-against-property referrals.
- Bundle lending with insurance, wealth and merchant payments to raise customer retention and revenue per active user.
- Build NBFC governance, risk, collections, capital and compliance capabilities while maintaining a partner-led distribution model.
- Use lending, insurance and wealth revenue growth to strengthen the IPO narrative beyond UPI market share and payment volumes.