Your Paytm Wallet Will Give You Instant Digital Loan: How Will It Work?
India’s #1 mobile wallet: Paytm has jumped into the digital loan niche, leveraging their 20 crore users pan-India, and billions of transactions per month.
For this purpose, Paytm has collaborated with Clix Finance, which is a non-banking financial company.
Paytm Digital Loans: How Will It Work?
In order to facilitate instant digital loans, Paytm has launched new features in their app, called “Deferred Payment or Postpaid” and “Merchant Lines” facilities.
Now, the question is, how will Paytm decide the eligibility of the loan, and whom to give the loan?
For this purpose, Paytm and Clix Finance has created special algorithms, using Machine Learning, which will evaluate the potential of every user and merchant, based on their credit history, loan shall be approved.
Nitin Misra, Senior Vice President, Paytm said, “With this partnership, we aim to bring our credit tested algorithmic lending products to a larger customer and merchant base.”
As per Pramod Bhasin, Founder and Chairman, Clix, their new partnership will now focus extensively on the MSME sector, and provide new financial products and services, which will help them to grow their business.
Hence, 60 lakh strong MSME sector is their target audience at this moment.
Paytm’s Crucial Partnerships For Instant Loans
Along with Clix Finance, Paytm has also partnered with other Non-Banking Finance Companies like Tata Capital and Indifi for dispersing instant digital loans to users.
This has been done since a case was filed against Paytm, for providing credits to merchants via Paytm Payments Bank and Paytm postpaid service.
Paytm Payments Bank, was offering Rs 60,000 credit to merchants via Paytm Postpaid service.
Since Paytm Payments Bank or Paytm Wallet (under which Paytm Postpaid service exists) is not a NBFC, this move by Paytm was challenged in the Delhi High Court.
Paytm Payments Bank, or any other Payments Bank is not allowed to extend credit to users, and can only accept deposits till Rs 1 lakh.
Earlier, Paytm Payments Bank had collaborated with ICICI Bank for launching financial service products, but the partnership fell through.
It would be interesting to observe, how Paytm’s new instant loan facility evolves over time, and whether it would be accepted by the users and merchants or not.
We will keep you updated, as more details come in.