Indian digital payments giant Paytm has announced its ambitious plan to double its loan disbursement target for the current fiscal year. The company aims to disburse loans amounting to ₹1,000 crore by March 2021, a significant increase from the ₹550 crore disbursed in the previous financial year.

Collateral-Free Loans

Paytm offers collateral-free loans of up to ₹500,000, with loan repayment primarily facilitated through merchants’ daily settlements with Paytm. Notably, the company does not impose prepayment charges on these loans, enhancing accessibility and flexibility for borrowers.

Strategic Partnerships

Initiating its lending operations in collaboration with various NBFCs and banks, Paytm leverages partnerships to extend its financial services. Notably, Paytm Payments Bank is currently restricted from lending activities as per RBI regulations. In 2018, Paytm forged a partnership with Clix Capital to facilitate loan disbursals.

Empowering Small Businesses

Bhavesh Gupta, CEO of Paytm Lending, emphasizes the company’s commitment to supporting small businesses, including kirana stores, and addressing their credit needs. Through collateral-free instant loans, Paytm aims to bridge the gap for entrepreneurs who often struggle to access traditional banking services. Gupta, who assumed his role at Paytm last year, previously served as the CEO of Clix Capital.

Merchant-Centric Approach

Under the leadership of Vijay Shekhar Sharma, Paytm has prioritized the merchant category, claiming a 50% market share in merchant payments. With acceptance by 17 million merchants, 70% of whom are active, Paytm is strategically positioning financial services as a key growth driver.

Fostering Financial Inclusion

In addition to lending initiatives, Paytm’s Paytm for Business app competes vigorously with platforms like Khatabook. The app empowers merchants by providing real-time payment tracking, seamless navigation of past collections, and efficient settlement management.

Paytm’s aggressive expansion in the lending space underscores its dedication to fostering financial inclusion and empowering small businesses in India’s dynamic economic landscape.