Fino Payments loan referrals triple as it eyes small finance bank
Fino Payments Bank's loan referral business surged 3.5 times year-on-year in June, highlighting a crucial pivot towards lending as its legacy cash-based transaction revenue continues to collapse.
Fino Payments Bank reported a 3.5-fold year-on-year increase in loan referral disbursals to ₹240 crore in June, marking significant progress in its strategy to transition into a small finance bank. Average total deposits grew 11% to ₹2,755 crore during the month, while the bank opened 3.1 lakh new accounts to expand its total customer base to 1.8 crore.
"The Bank's loan referral business segment, which serves as a pilot for its proposed Small Finance Bank, continued to make strong progress, with referral loan disbursals increasing 3.5x to ₹240 crore. This underscores the strong credit potential within its customer ecosystem and supports the bank's long-term lending strategy," the bank said in a regulatory filing. To operationalize this shift, Fino partnered with fintech Ezee.ai in June to integrate artificial intelligence-powered loan origination and collections platforms.
This emerging lending momentum is offsetting a continued, structural decline in the bank's legacy payments business. Transaction throughput, encompassing remittances, micro-ATM, and AePS transactions, dropped 35% year-on-year to ₹2,830 crore. Management attributed this contraction to the ongoing migration of Indian consumers from cash to UPI, though it noted the pace of decline is finally moderating as it prioritizes higher-quality, active merchants.
The market has reacted harshly to this transitional friction. Fino's net profit for the fourth quarter of fiscal year 2026 crashed 70.4% to ₹7.1 crore, down from ₹24 crore a year earlier. The stock has lost 71% of its value since peaking at ₹467 in September 2024, suffering a brutal 63% cumulative drop over four straight months through March 2026.
Although shares have recovered some ground recently, they remain below December lows, indicating persistent investor scepticism. The June update, which is based on provisional and unaudited figures, suggests the underlying digital engagement required for a lending pivot is building. Monthly active users on the FinoPay application climbed 38% to 8.4 lakh, providing a larger pool of potential credit customers as the bank awaits its small finance bank licence.
