Paytm, an e-commerce payment system in India proposes to payout loans worth Rs 1,000 crore to merchants by March. These loans will assist the merchants to expand their operations, to increase efficiency, to digitize the business, and thus providing support to the Digital India campaign launched by the Government of India.
Officials of the company said that they will offer collateral-free loans for Paytm business app users. These loans are issued as a part of their ‘Merchant Lending Program’. They will provide loans worth Rs 1,000 crore to the businesses based on the data that the company has about 17 million merchants. They intend to allocate the targeted loans by March.
Paytm insists that they had handled loans of around Rs 550 crore to more than a lakh merchant partner in the last financial year. The company had restated its obligation towards the development of Micro Small Medium Enterprises (MSMEs) by extending collateral-free loans up to Rs 5 lakh. It will be offered at a low-interest rate and includes products with distinctive EMI (Equated Monthly Installment) customized daily for micro-merchants. The repayment of loans will be usually collected from the merchant’s daily settlement with Paytm. There will not be any prepayment charges on these loans.
The company’s offer on collateral-free loans will be done in partnership with Non-Banking Finance Companies (NBFCs) and other banks. Bhavesh Gupta, Lending CEO of Paytm commented that through offering collateral-free instant loans they aim to uplift the Kirana stores & other small business owners who do not have quick access to loans and are left behind by the traditional banking sector.
Paytm is a digital financial services firm based in Uttar Pradesh, India. These services are currently accessible in 11 Indian languages and it includes online use-case services like mobile recharges, bill payments, travel, and event bookings. It is also used for in-store payments at grocery stores, fruits and vegetable shops, restaurants, tolls, and educational institutions with the help of Paytm QR code. As per the company’s insight, over 7 million merchants across India make use of their QR code payment system to get payments straight away into their bank account.