Clix Capital is in advanced talks with One97 Communications, which controls Paytm, for a strategic stake in its planned peer-to-peer (P2P) lending platform, sources told Business Standard.
“The two sides have had multiple discussions. Now the finer points of the deal are being discussed. This deal, if it happens, will help Paytm kick-start the P2P lending business,” a source told the newspaper.
AION Capital, which has an 85% stake in Clix Capital, was formed by buying the commercial lending and leasing business of GE Capital in India. About 15% of the equity in Clix Capital is held by former Genpact founder Pramod Bhasin and former head of DE Shaw in India Anil Chawla.
Clix is planning to raise over USD 250 million from new investors to fund its growth plans. It had a lending book of over USD 500 million last year, said Parth Gandhi, MD of AION Capital Partners. Currently, it has three lines of lending: corporate, small and medium enterprises, and consumer lending. If the deal with Paytm materialises, it will be able to add another dimension to the business.
Spokespersons of Paytm and AION Capital declined to comment on the negotiations.
Paytm has already registered with the Reserve Bank of India (RBI) to run a P2P lending platform as an intermediary providing the services of loan facilitation via an app or the web, sources told Business Standard. It has not begun this service yet.
The digital platform would match borrowers looking for a loan and lenders who want to offer loans at various rates of interest with a maturity period of 36 months. Despite its popularity abroad, such platforms have not taken off in India where only around a dozen companies who have disbursed less than Rs 100 crore offer the service.
P2P companies are finding it difficult to raise money from foreign investors to expand their platforms also because of a restriction by RBI, which has imposed a Rs 10 lakh cap on the exposure that a lender can have on the platform.
Paytm has started offering loans of up to Rs 1 lakh to its 10 million-odd merchants.