Back in 2010-11, I would often tail my parents into consumer-durable stores to try and influence them to buy me goods from the brands I preferred. I vividly remember how we would be persuaded by Bajaj Finance representatives who were almost omnipresent at all of these stores, trying to smooth-talk us into buying things on a loan. To an extent that my father once bought us a washing machine on a Bajaj Finance loan. This, in a relatively smaller town in India's eastern state of West Bengal. A little over a decade, the Bajaj Finance's business model finds itself in need of a refresh. This time, however, on the whiteboards of Piramal Finance, a non-bank lender with US$2.4 billion in market capitalisation. If Bajaj chose to expand via consumer-durable loans, Piramal Finance is choosing fintechs. In less than two years, the company has partnered with 22 fintechs, including Paytm and ZestMoney (now acquired by PhonePe)—among the most number of partnerships any large non-bank has had. So much so that it's acquiring 95% of its customers via these fintechs. This spate of partnerships for Piramal Finance comes at a time when it has already spent over US$4 billion to acquire Dewan Housing Finance Ltd (DHFL), and also inherited its bad-loan mess. Can fintechs really be the boat that will help Piramal Finance navigate the choppy bad-loan waters? Especially when fintechs themselves need a lifeline?
