CFO Madhur Deora Says Fintech Giant Prefers Partnerships Over Direct Lending as Vijay Shekhar Sharma Eyes AI-Led Growth

The comments from Madhur Deora come at a time when several major fintech firms in India are aggressively pursuing NBFC licences to gain greater control over lending operations and diversify revenue streams.

However, Paytm believes its long-term growth lies in expanding payments, merchant services, artificial intelligence solutions, and wealth-tech offerings rather than taking direct balance-sheet lending exposure.

Asset-Light Strategy Remains Core Focus

Speaking during the company’s earnings interaction, Deora explained that Paytm remains comfortable with its current model, where lending activities are carried out in partnership with banks and NBFCs while the company focuses on customer acquisition, merchant distribution, technology infrastructure, and collections support.

According to the company, this approach allows it to scale financial services without taking on the credit risks associated with maintaining a large loan book.

Deora emphasised that India’s digital payments and consumer credit market is still underpenetrated, providing enormous growth opportunities even without becoming a lending institution itself.

Paytm believes distributing loans across multiple partner balance sheets is a more sustainable and scalable model than concentrating exposure within a single entity.

The strategy also helps the company remain relatively capital efficient while focusing resources on technology innovation and customer engagement.

Fintech Industry Moves Toward Lending Licences

Paytm’s cautious stance contrasts sharply with the direction taken by several fintech competitors. Companies such as PhonePe, MobiKwik, and other digital finance platforms have been actively exploring or securing NBFC licences to directly participate in the lending ecosystem.

Industry experts say NBFC licences provide fintech companies with better control over loan origination, customer relationships, capital deployment, and profitability. They also allow firms to reduce reliance on external lending partners and improve monetisation opportunities beyond payments.

However, obtaining and operating an NBFC comes with stricter regulatory oversight, capital requirements, and compliance obligations, especially after increasing scrutiny from Reserve Bank of India on the fintech sector.

The company’s decision also follows the regulatory action earlier this year involving Paytm Payments Bank, which intensified discussions around governance and compliance standards within digital finance businesses.

AI Emerges as Paytm’s Biggest Investment Theme

While ruling out aggressive expansion into direct lending, Vijay Shekhar Sharma made it clear that artificial intelligence will remain the company’s biggest investment priority going forward.

Sharma stated that Paytm’s future inorganic investments would be focused almost entirely on AI-related opportunities that can improve customer experience, merchant efficiency, and financial decision-making.

According to Sharma, AI has the potential to transform wealth management, trading, portfolio advisory, and customer support systems. He believes AI-powered agents could eventually automate portfolio monitoring, execute trading strategies, and help users make smarter financial decisions.

The company also plans to significantly strengthen Paytm Money, its wealth-tech platform, which management described as the company’s third major growth engine after payments and financial services.

Sharma suggested that rapid advancements in AI are reshaping the fintech industry so quickly that companies must rethink long-term investment strategies and product development priorities.

Strong Financial Recovery Supports Expansion Plans

The strategic update comes alongside a sharp improvement in Paytm’s financial performance. One97 Communications, the parent company operating the Paytm brand, reported a consolidated net profit of ₹184 crore in the fourth quarter of FY26, compared to a substantial loss recorded during the same period last year.

The company also reported strong growth in operational revenue, supported by rising payment volumes, merchant expansion, and improving financial services contribution.

Paytm stated that it currently holds more than ₹13,000 crore in cash reserves, which will be utilised for investments in artificial intelligence, technology upgrades, capital expenditure, and expansion of its margin trade funding business.

Analysts believe Paytm’s focus on AI, wealth-tech, and an asset-light financial services model reflects a broader shift in the fintech industry, where companies are increasingly balancing growth ambitions with regulatory compliance and sustainable profitability.

With digital payments adoption continuing to rise across India, Paytm is positioning itself not just as a payments platform, but as a technology-led financial ecosystem aiming to compete across multiple segments of the country’s rapidly evolving fintech landscape.