Paisalo Digital Ltd, a technology-enabled lending platform focused on expanding formal credit access to micro-enterprises, MSMEs and underserved borrowers, has entered into a memorandum of understanding (MoU) with LoanKhata for a proposed co-lending partnership of up to ₹1,000 crore.
Under the proposed arrangement, Paisalo would fund 80% and LoanKhata 20% of each eligible loan. The facility will primarily target micro-enterprises and MSMEs, strengthening Paisalo’s efforts to accelerate loan-book growth while expanding its distribution footprint across underserved markets.
The proposed partnership comes as Paisalo advances its three-year strategic roadmap to double its assets under management (AUM), total income and profit after tax (PAT), while maintaining a strong focus on asset quality and disciplined risk management.
Expanding distribution reach
The partnership brings together the complementary distribution networks of Paisalo and LoanKhata. Paisalo has expanded its network from 1,052 touchpoints in FY23 to 5,995 touchpoints as of Q1 FY27. Its current network comprises 424 branches, 3,997 distribution points and 1,574 business correspondents across 23 states.
LoanKhata, meanwhile, brings a last-mile ecosystem of more than 1,00,000 retailers with CSP registration and access to a customer base exceeding 90 million.
The combined distribution reach is expected to strengthen customer sourcing, onboarding and engagement, particularly across semi-urban and rural markets.
Supporting 2x growth roadmap
The proposed ₹1,000 crore co-lending facility is expected to support Paisalo’s ambition of doubling AUM, total income and PAT over the next three years. It will also enhance origination capacity in the micro-enterprise and MSME segments while allowing the company to leverage an asset-light distribution model through LoanKhata’s existing retailer network.
The partnership is also aimed at accelerating borrower acquisition without compromising Paisalo’s underwriting and risk-management framework.
Paisalo Digital Ltd Deputy Managing Director, Santanu Agarwal said: “Paisalo is focused on scaling up. We have built strong momentum across AUM growth, profitability, distribution expansion and asset quality, and our three-year roadmap is focused on doubling AUM, income and PAT while preserving the discipline of our lending franchise.”
He added :“The proposed ₹1,000 crore co-lending partnership with LoanKhata represents an important milestone in that journey. By combining LoanKhata’s extensive network of over 1,00,000 retailer/CSP touchpoints and access to more than 90 million customers with Paisalo’s 5,995 touchpoints, technology-enabled underwriting, digital onboarding and collection capabilities, we are creating a scalable operating model to serve a larger base of eligible MSME and microenterprise borrowers across India.”
Technology-led expansion
Paisalo said the proposed partnership is part of its transition from a high-touch, high-tech lender to a more AI-enabled, distribution-led and partnership-driven lending platform.
The company intends to combine its underwriting, digital onboarding and collections capabilities with LoanKhata’s extensive last-mile network to deepen access to formal credit while retaining its focus on responsible lending and governance.
The partnership is therefore expected to provide Paisalo with a wider sourcing engine, stronger access to MSME and micro-enterprise borrowers and greater operating leverage as it pursues its medium-term growth targets.