Paytm aims to disburse Rs 1,000 cr worth loans to merchants by March

Credit worthiness of each merchant is worked out based on daily transaction patterns

paytm Representational image | File

Digital financial services firm Paytm on Monday said it aims to disburse loans worth Rs 1,000 crore to merchants by March.

The company said it will continue to offer collateral-free loans under the 'Merchant Lending Program' to Paytm for Business app users.

"We will be enabling loans of Rs 1,000 crore to businesses based on the data we have on our 17 million merchants. These loans would help them digitise their business and diversify their operations, to improve their efficiency and support them to join the Digital India mission," Paytm said in a statement.

The company said it aims to disburse targeted loans by March.

Paytm works out the credit worthiness of each merchant based on daily transaction patterns and then offers them a collateral-free loan in partnership with non-banking finance companies and banks.

"The company has today reaffirmed its commitment towards the growth of MSMEs by expanding collateral-free loans of up to Rs 5 lakh at a low-interest rate and unique daily EMI product customized for micro-merchants," the statement said.

Loan repayment is primarily collected from the merchant's daily settlement with Paytm and there are no prepayment charges on these loans.

Paytm claims that it processed loans worth Rs 550 crore to over a lakh merchant partners in the last financial year.

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," Paytm Lending CEO Bhavesh Gupta said. 

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