Digital lenders struggle to grow profit amid high expenses
Bengaluru-based Kreditbee reported a 20% fall in net profit to Rs 20.7 crore for the quarter ended September 30 from Rs 25 crore a year back. Its operational revenue jumped 73% to Rs 518 crore, but its expenses shot up 84% as well, driven by increasing cost of borrowing and impairment on financial instruments.
Fintechs that typically cater to the riskiest segment of the country’s consumer base have seen their cost of borrowing go up. Industry insiders peg the increase to be anywhere between 125 basis points and 300 basis points, depending on the spectrum of operations.
“For base layer NBFCs, the increase of their cost of borrowing would have gone up by 200 basis points and above; for the middle layer, it will be around 50-80 basis points and for the largest players, it would be a maximum of 50 basis points,” said Santanu Agarwal, deputy managing director at Paisalo Digital, a New Delhi-registered NBFC.
Pune-based Fibe reported a net profit of Rs 12.4 crore, keeping it flat compared with a year earlier. While its operational revenue rose 56% to Rs 252 crore, expenses went up 63% to Rs 235 crore.
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