After launching loans for its small and medium-sized traders last year, BharatPe is looking to expand its financial services stack with working capital loans, credit cards and other lending products, its new president said. of group. Suhail Sameer told MediaNama in an interview.
BharatPe’s was recently valued at $ 500 million, backed by investors like Sequoia Capital, hedge fund Coatue Management and Insight Partners. With a user base of over 5 million merchants, the company is now aiming to become a digital lending app, as opposed to a payment app, and is working on new lending products with its lending partners.
âWe basically believe that it is difficult to make money with payments in India because retailers operate with very low margins. We encourage loans and cross-selling other services and I expect loans to contribute at least 80% of our income in the coming times, âSameer said. He added that the company is considering applying for a license to become an NBFC and that at some point it will consider expanding to become a bank.
MediaNama: What lending services are you looking to launch?
Suhail sameer: We are planning to launch cards, a one-month cash advance, some secured loan products, and distributor financing in the future. All loan requests below ??10 lakh made by a merchant on the BharatPe network are financed by P2P lenders, while for merchants who want a loan greater than ??10 lakh, the credit is provided by an NBFC, he explained.
MediaNama: How has the loan portfolio grown over the past year?
Suhail sameer: In January-February, we disbursed loans of around 10 to 12 crore per month. But once the economy opened up after the Covid lockdowns, the lending platform began to drop from 15 crore in July to 100 crore in October. This month we will probably shell out 130 crore in loans. About 60% of these loans are provided by Peer-2-Peer (P2P) lending partners and the remainder by regular partners of non-bank finance companies (NBFC) [â¦] We will have fully disbursed 650 crore in loans by the end of this month, and approximately 150,000 unique traders have received these loans.
MediaNama: What are your payment volume targets this year?
Suhail sameer: Since the April and May lows, our trades have increased 3.5 times thanks to the doubling of UPI. In October, we achieved approximately $ 6 billion in annualized transaction value; by increasing its market share and total payment volume (TPV). We also launched a card acceptance machine in early August, which is growing well and we are currently processing an annualized transaction value of US $ 2 billion through these machines. We have deployed around 35,000 devices and each device is making 3.5 lakh per month.
We are expanding into 65 cities by the end of December and hope to deploy 100,000 card machines by March 2021. This should lead to an annualized transaction value of at least US $ 5 billion on the card side and in combination with QR Payments the company aims to close this fiscal year by processing more than $ 10 billion in annualized transaction value.
MediaNama: How have the acquisition costs of retailers evolved during the last pandemic?
Suhail sameer: The cost of acquiring the company per trader dropped slightly from 210-215 yen to 155 yen. This is mainly because there is a lot of inbound or organic interest from merchants who download the app and order the QR codes themselves, compared to the past where we had to market the app to merchants. physically.
Two trends are emerging among new traders. The first is on the QR side where the majority of new merchants come from the grocery store area, whereas, in the past, 30% of our merchants came from restaurants which have been strongly impacted due to the pandemic. The second is on the back of the card machine. The quality of the merchants is a cut above that of regular merchants and some stand-alone stores are showing a keen interest in purchasing card machines.
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(Updated March 13, 2021 at 5:15 p.m.). Updated based on editorial direction. Originally published November 27, 2020.