After the Indian government hailed the growth of micro, small and medium enterprises (MSME) in the country as the key to getting out of the economic crisis caused by the COVID-19 pandemic, Paytm has announced its plans to give out ₹1000 crore in loans to boost MSMEs in India by March 2021. Owners of various MSMEs can avail collateral-free loans of up to ₹5 lakhs under the new Paytm scheme at very low-interest rates and “unique daily EMI product customized for micro-merchants”.
The loans will be provided with a ‘daily repayment flexibility’, where the repayment will be collected mostly through the merchant’s daily settlement with the company. The platform has partnered with multiple lenders and NBFCs to offer collateral-free loans.
“With our collateral-free instant loans, we are trying to help Kirana stores & other small business owners who have been left behind by the traditional banking sector and do not have easy access to loans and credit. Going forward, we will especially focus on EDC merchants and provide higher loan amounts based on their EDC transactions.,” said Bhavesh Gupta, CEO of Paytm Lending.
Paytm claims that the company has always invested in the growth of MSMEs in the country. Being one of the largest digital payments services in India, Paytm has catered to millions of small and medium merchants in India. The company’s ‘ All-in-One QR’ has been adopted by over 17 million merchants across the country, according to Paytm, which enables businesses to accept payments through Paytm wallets, bank accounts, UPI and Rupay Cards.
The All-in-One Android POS device developed by the company, which supports various payment modes including Paytm Wallet, UPI, and debit and credit cards, has reached out to more than 2 lakh MSMEs in the country. It also has a dedicated ‘Paytm for Business’ app that lets small merchants track payments, navigate through the past collections and track settlements made to their preferred bank accounts. Paytm claims that it leads the offline payments (P2M) segment with over 50% market share by providing all kinds of payment methods to merchants.
Currently, the fintech giant offers collateral-free loans under its ‘Merchant Lending Program’ through its Paytm for Business app. The program determines the creditworthiness of a merchant by assessing their daily transactions with the help of an algorithm. Post assessment, the program decides the pre-qualified loan offering for the merchant. According to Paytm, it has disbursed loans worth ₹550 crore in the last financial year to over a lakh merchant partners.
The company said, “Paytm is on a mission to provide instant credit for those who do not have access to loans from the traditional banking sector due to lack of collateral or credit score. Recently, the company has launched ‘Next Generation Credit Cards’ and Personal Loans for ‘new to credit’ customers. Availing of an instant credit facility from Paytm is a completely digital experience – from submitting an application to tracking status and finally receiving the credit.”
