Digital lender mPokket plans to scale annual loan disbursals to ₹25,000 crore and reach a ₹20,000 crore loan book within three years. The company is targeting students and young professionals in tier-2 and tier-3 cities while diversifying into small business loans. This expansion occurs as fintech firms face increased regulatory scrutiny regarding underwriting and asset quality.
Digital lending platform mPokket has announced a medium-term growth strategy aiming for ₹25,000 crore in annual loan disbursals within the next three years. The company also intends to expand its loan book to ₹20,000 crore. This push for growth is focused on reaching borrowers in smaller tier-2 and tier-3 cities who often struggle to access credit from traditional banks due to a lack of formal credit history.
Targeting the New-to-Credit Segment
The company has built its business model around the New-to-Credit (NTC) segment, which includes students and young working professionals. According to the company, it has already served 6.5 million customers in this category. For many of these individuals, digital platforms serve as the primary entry point into the formal financial system. The company reported a 20% year-on-year growth rate in this user base over the past three years, indicating sustained demand for micro-credit services.
Expanding Beyond Micro-Loans
To drive this aggressive growth, mPokket is diversifying its offerings beyond its core micro-lending business. The platform is increasing ticket sizes, now offering loans of up to ₹2 lakh, specifically aimed at small business owners. By moving into higher ticket sizes, the firm is attempting to capture more value from its existing user base while diversifying its portfolio. This strategy is also intended to help the company integrate more deeply into the broader financial ecosystem.
Regulatory Context and Risk Management
Fintech companies in India are currently operating under stricter regulatory oversight from the Reserve Bank of India, particularly concerning underwriting standards and customer data protection. As digital lenders scale their loan books, maintaining asset quality becomes a critical challenge. High-growth targets often put pressure on lending platforms to balance speed with risk assessment. The company has stated that it maintains strict risk parameters even as it scales, though the ability to manage defaults among NTC borrowers will be a key performance indicator.
Industry Outlook
The digital lending space remains competitive, with several players vying for the same demographic of young, tech-savvy borrowers in smaller cities. The success of this growth plan will depend on the company's ability to keep its cost of funds low and manage loan defaults, especially as it moves into the slightly riskier segment of small business lending. Moving forward, the most important updates to follow will be the company's portfolio quality reports, any changes to the cost of capital, and its ongoing compliance with evolving digital lending regulations.