Paytm aims to disburse ₹1,000 crore in loans to MSMEs by March 21

Digital financial services platform Paytm plans to provide collateral-free loans of up to ₹500,000 at a low-interest rate and unique daily EMI product customized for micro-merchants.

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. 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 ₹550 crore benefiting over a lakh merchant partner.

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.