The Walmart-backed fintech is now facilitating around ₹2,000 crore in loan disbursals every month through its platform
PhonePe is increasingly leaning on its lending business to strengthen its growth narrative ahead of its planned public listing, as monetisation of its dominant UPI payments business remains constrained.The Walmart-backed fintech is now facilitating around ₹2,000 crore in loan disbursals every month through its platform, with lending split between consumer and merchant credit. Merchant lending alone has reached an annualised disbursal run rate of about ₹14,000 crore, while consumer loans account for the remaining disbursals, according to people familiar with the matter.The scale-up marks a sharp acceleration from FY25, when PhonePe arranged around ₹4,500 crore of merchant loans, highlighting the company’s growing focus on financial services beyond payments.Balance sheetPhonePe does not lend from its own balance sheet. Instead, it operates as a loan sourcing and distribution partner, connecting borrowers with 56 lending partners through its payments network. The company has also applied for an NBFC licence, with its application filed in November 2025, and is awaiting regulatory approval. The licence would enable it to deepen its presence in the lending ecosystem.The lending push comes as PhonePe prepares to revive its IPO plans after postponing its public issue earlier this year due to geopolitical tensions in West Asia and volatile market conditions.The company’s FY26 financials underscore the challenge of relying on payments alone. PhonePe reported an 11 per cent increase in consolidated revenue to ₹7,920 crore, while its net loss widened 62 per cent to ₹2,792 crore, largely due to investments in newer businesses such as Share.Market, Pincode, Insurance and Indus Appstore.Despite commanding over 45 per cent of India’s UPI market, the payments business offers limited monetisation opportunities because UPI transactions carry zero merchant discount rate (MDR). As a result, PhonePe has been expanding into higher-margin businesses such as lending, wealth management and insurance to diversify revenue streams.The company also saw momentum in the second half of FY26, with adjusted operating revenue rising to around ₹3,746 crore, compared with ₹3,162 crore in the first half after excluding discontinued and policy-driven revenue streams. For investors evaluating its IPO, the pace of growth in lending is likely to be a key indicator of PhonePe’s ability to build sustainable revenue beyond digital payments.Published on July 27, 2026
