Digital financial services platform Paytm on Monday said it is expanding its collateral-free loans for MSMEs from Rs 550 crore in the last fiscal year to Rs 1,000 crore by March 2021. In a statement, Paytm said it is expanding its collateral-free loans of up to Rs 5 lakh at a low-interest rate and unique daily EMI product customised for micro-merchants.
Bhavesh Gupta, CEO of Paytm Lending, said, “With our collateral-free instant loans, we are trying to help kirana stores and 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 electronic data capture (EDC) merchants and provide higher loan amount based on their EDC transactions,” he added.
Paytm offers collateral-free loans under its ‘Merchant Lending Program’ in the Paytm for Business app. The algorithm determines the credit-worthiness of a merchant based on his/her daily transactions and arrives at a pre-qualified loan offering.
Paytm has digitised the process — starting from the loan application, and approval to disbursal, with no additional documents required — in partnership with NBFCs and banks. The company said loan repayment is primarily collected from the merchant’s daily settlement with Paytm and there are no prepayment charges on these loans.
Its recently launched Paytm All-in-One Android POS device has enabled over two lakh MSMEs to accept all payment modes, including Paytm Wallet, all UPI based apps, Debit and Credit Cards and cash, Paytm said.
The Paytm for Business app helps kiranas track payments instantly, navigate through past collections and track settlements made to their bank accounts. This app is available in 10 regional languages.
Earlier this month, Paytm partnered with Marg ERP to provide payment reconciliation services using Marg’s integrated payments solution Margpay.
In October 2020, Paytm announced the launch of same-day settlement facility for all types of fund transfers on its payment gateway. The move seeks to help MSMEs that depend upon immediate availability of funds to pay down-stream partners.