Fino’s Loan Referral Bet Gets A 204% April Boost

Fino Payments Bank’s April 2026 update showed loan referral disbursals jumping 204% YoY, even as transaction throughput saw sharp pressure.

Key Takeaways

1. Fino Payments Bank reported ₹166 crore loan referral disbursals in April 2026, up 204% from ₹55 crore in April 2025.
2. The previous major update came in March 2026, when Q4 FY26 referral disbursals had reached ₹540 crore by 20 March 2026.

Fino Payments Bank’s April Update Shows A Big Credit Push

Fino Payments Bank reported a sharp jump in its loan referral business in its April 2026 business update released on 8 May 2026. Loan referral disbursals rose to ₹166 crore in April 2026 from ₹55 crore in April 2025, showing 204% YoY growth, as per the bank’s official business update.

In the short term, this shows that Fino’s merchant-led model is finding higher traction in credit referrals. Over the long term, it can help the bank build a stronger lending-linked income stream as it prepares for its Small Finance Bank transition. The weak spot is transaction business throughput, which fell 47% YoY, while B2B UPI P2M throughput dropped 96% YoY in April 2026.

The deposit and digital customer numbers show that Fino is still adding users and balances, even while some payment-led businesses are slowing.

Small-Ticket Credit May Reach More Bharat Customers

The loan referral surge can help small merchants, rural customers and semi-urban borrowers access formal credit through familiar banking points. Fino’s earlier March update said the current portfolio was focused on secured products such as home loans, gold loans, loans against property and merchant business loans. 

This is important for users who may not visit full-service bank branches often. If referrals are backed by partner NBFC underwriting, the bank can source credit without carrying the full loan risk on its own books. Business Standard reported on 25 March 2026 that partner NBFCs underwrite and carry the credit risk, while Fino uses its merchant network to originate loans. 

Experts See Opportunity, But Profit Pressure Remains

Market commentary is not only positive. Moneycontrol reported on 4 May 2026 that Fino’s Q4 profit decline was linked to a deeper structural squeeze, with digital payments hit by regulatory scrutiny, merchant onboarding issues and real-money gaming restrictions, citing an Emkay research note. 

A practical solution for Fino is to keep scaling secured loan referrals, protect merchant quality and reduce dependence on low-margin payment throughput. LoansJagat’s 6 May 2026 BFSI loan growth report also noted that lenders may become selective, even though the sector is not facing a crisis.

The April 2026 update builds on that earlier lending momentum, but the next test will be whether referral-led growth can offset lower payment volumes.

Conclusion

Fino’s 204% loan referral jump gives it a stronger credit story before its Small Finance Bank transition. The concern is simple: lending momentum must now grow without letting weak transaction throughput pull down overall performance.

FAQs

How Do Payments Banks Differ From Small Finance Banks In India?

Payments Banks and Small Finance Banks serve different purposes in India’s banking system. A Payments Bank can accept deposits up to the permitted limit, offer savings accounts, remittance services, UPI, debit cards and digital payments, but it cannot directly lend money.

A Small Finance Bank can accept deposits and also give loans to customers, small businesses, farmers and micro-enterprises. Payments Banks mainly focus on financial inclusion through digital and merchant-led services, while Small Finance Banks have a wider banking role. This is why Fino Payments Bank’s move towards becoming a Small Finance Bank is important for future credit expansion.

How Does Fino Payments Bank Work In India?

Fino Payments Bank is a digital payments bank in India that offers basic banking services through mobile banking, merchant points and banking outlets. Customers can open savings accounts, deposit money, withdraw cash, transfer funds, pay bills and use UPI services. 

It mainly serves small merchants, workers, rural customers and people who need easy banking access near their location. Unlike a regular bank, a payments bank has restrictions on lending directly, but Fino has been expanding through digital services and loan referrals. It also received in-principle approval to transition into a Small Finance Bank.