Paytm is set to expand into Saudi Arabia, the UAE, and Singapore, increasing its default loss guarantees to enhance lending operations. The company appointed Bimal Julka as a non-executive independent director to strengthen governance. This move aligns with the broader trend of Indian fintech startups exploring opportunities in the Middle East and Southeast Asia.
Paytm is making strategic moves to expand its operations into Saudi Arabia, the UAE, and Singapore, joining several Indian fintech companies targeting growth in the Middle East and Southeast Asia. Notable players in these regions include M2P Fintech, which is supporting banking services, while CCAvenue and Pine Labs have launched payment solutions there.
To bolster its lending capabilities, Paytm has increased its default loss guarantees to Rs 350 crore from Rs 225 crore for its partnership with SMFG India Credit Company, formerly known as Fullerton India. This enhancement is intended to support its non-banking finance partner in managing risk more effectively.
The Reserve Bank of India permits fintech firms to provide default guarantees up to 5% of the total loans disbursed through their partners, enabling them to foster greater trust and encourage lending.
In a further development, Paytm has appointed Bimal Julka, a former bureaucrat and ex-secretary of the Ministry of Information and Broadcasting, as a non-executive independent director on its board. This addition to the board aims to strengthen governance and oversight as the company scales its initiatives. Ravi Chandra Adusumalli, who represents Elevation Capital, also continues to serve as a non-executive independent director on the board.
The expansion of Indian fintech companies into international markets such as the Middle East and Southeast Asia signals a broader trend of globalization within the financial technology sector. These regions offer significant growth potential due to increasing digital payment adoption and financial services innovation. Paytm’s strategy to enhance its lending through increased guarantees reflects an effort to mitigate risks associated with lending in these new markets, while the appointment of experienced directors aims to provide strategic insights and governance.
In summary, Paytm is actively pursuing expansion into key international markets while enhancing its lending operations through increased guarantees. The company’s strategic appointments to its board reflect a commitment to robust governance as it navigates new territories. As it enters Saudi Arabia, the UAE, and Singapore, the firm aims to leverage growth opportunities in the rapidly evolving fintech landscape.
Original Source: economictimes.indiatimes.com
