Non-banking finance companies are leveraging QR code payment platforms to extend unsecured loans to small merchants, with monthly disbursals reaching ₹1,000-1,500 crores through fintech partnerships. This technology-driven approach is enabling NBFCs to expand their unsecured lending portfolios while mainstream banks remain cautious about uncollateralized loans.

NBFC-Fintech Partnership Model

Major NBFCs including Aditya Birla Finance, L&T Finance, Poonawala Fincorp, and SMFG India Credit have established partnerships with payment platforms such as BharatPe, Paytm, and PhonePe to source merchant loans. These fintech companies serve as sourcing partners and receive commissions for facilitating loans that demonstrate low delinquency rates through daily partial repayment structures.

The scale of this business model is substantial, with industry sources indicating monthly disbursals of ₹1,000-1,500 crores sourced through payment applications. One97 Communications-run Paytm has disclosed quarterly disbursal volumes of approximately ₹4,500 crores, while other fintech platforms are estimated to process ₹3,000-4,000 crores in monthly disbursals.

Market Performance and Portfolio Growth

Several NBFCs have reported strong growth in their merchant lending segments. Aditya Birla Finance's business loans to MSMEs now comprise over 55% of its portfolio, representing 23% year-on-year growth. The company's current MSME portfolio stands at ₹77,532 crores, with 82% secured and 18% unsecured lending.

Poonawala Fincorp has launched a dedicated shopkeeper loan product, offering credit ranging from ₹1 lakh to ₹15 lakh with tenures spanning six months to four years. Products including gold loans, education loans, and shopkeeper loans now represent approximately 17% of the company's overall disbursements.

Technology-Enabled Risk Management

The QR code-based lending model provides NBFCs with enhanced risk management capabilities through cash flow-based underwriting and daily repayment processing. Payment platforms can predict potential defaults by monitoring merchant transaction patterns, with collection agencies deployed when merchants cease QR code usage for consecutive days.

This approach addresses a market gap that traditional banks have been hesitant to fill due to regulatory constraints and risk considerations. Banks typically focus on more organized borrowers and retail customers, creating opportunities for NBFCs to serve small merchants through technology-enabled solutions.

Operational Advantages and Merchant Acquisition

The partnership model offers several operational benefits for both NBFCs and payment platforms:

• Reduced merchant acquisition costs as loan offers are displayed directly within payment applications
• Field staff deployed by payment companies can offer loans during routine merchant visits
• Most merchants receive pre-approved loan amounts, enabling fast disbursals
• Daily repayments align better with small business cash flows compared to traditional monthly EMI structures
• Payment applications facilitate EMI deductions from end-of-day settlement cycles

Platform Expansion and Future Outlook

Paytm has expanded its financial services reach to 650,000 merchants by the end of the September quarter, compared to 600,000 merchants in the previous year. The company is pursuing measured growth to maintain strong asset quality while building partnerships with NBFCs seeking high-quality credit portfolios.

This measured approach reflects the industry's focus on sustainable growth while leveraging technology to bring formal credit access to hundreds of small businesses previously excluded from traditional banking services.