Digital financial services platform Paytm on Monday announced that it will provide MSMEs collateral-free loans of up to Rs 5,00,000 at a low-interest rate and unique daily EMI product customized for micro-merchants. In total, it looks to provide loans worth Rs 1000 crore by March 2021. Paytm has over 50% market share in P2M segment and offers different digital payment methods. 

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The recently launched Paytm All-in-One Android POS device has enabled over 2 lakh MSMEs to accept all payment modes, including Paytm Wallet, all UPI based apps, Debit & Credit Cards and most importantly ‘Cash’. The 'Paytm for Business' app has also become growth enablers for kirana stores as it helps them to track payments instantly, navigate through the past collections and track settlements made to their preferred bank accounts. This app is available in 10 regional languages and is efficiently used by retailers in small cities & towns. 

The company continues to offer collateral-free loans under the 'Merchant Lending Program' in Paytm for Business app. Its algorithm determines the credit-worthiness of the merchant based on his daily transactions and arrives at a pre-qualified loan offering. 

Paytm has digitised the entire process starting from the loan application, approval to disbursal with no additional documents required in partnership with NBFCs and banks. Loan repayment is primarily collected from the merchant’s daily settlement with Paytm and there are no prepayment charges on these loans. In the last financial year, Paytm has processed loans worth Rs 550 crore benefiting over a lakh merchant partner. 

“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 amount based on their EDC transactions,” Bhavesh Gupta, CEO - Paytm Lending said.