MobiKwik Battles Fraud, Eyes Profitability Amid Financial Challenges

Fintech firm MobiKwik reported a consolidated loss of Rs 28.6 crore due to a fraud in the September quarter. The company has been recovering lost funds and is close to achieving operational profitability, with its loan distribution business showing significant profits and margins above 40% this quarter.

Fintech firm One MobiKwik Systems announced a significant Rs 28.6 crore consolidated loss in the September quarter, attributed to a fraud incident involving a technical bug. This marks a stark increase from the Rs 3.59 crore loss in the same period last year.

The company alleged that some registered merchants exploited a technical flaw, fraudulently claiming settlements totaling Rs 403.59 million. MobiKwik has since taken legal measures to recover the funds, securing Rs 21.92 crore and pursuing Rs 118.30 million still outstanding.

Despite the challenges, CEO Bipin Preet Singh emphasized progress towards operational profitability, crediting the loan distribution business for its high margins. MobiKwik, which enlisted 3.3 million new users last quarter, aims to accelerate growth in UPI and digital lending.

(With inputs from agencies.)