Digital payment and financial services platform, Paytm has planned for providing collateral-free loans of up to Rs 500,000 at low-interest rate with unique daily EMI product customization for MSMEs. In the last financial year, the company has processed loans worth Rs 550 crore that has benefited over a lakh merchant partner.
Paytm continues to offer collateral-free loans in Paytm’s Business app under the ‘Merchant Lending Program’. The algorithm determines the credit-worthiness of the merchant which is based on the daily transactions and arrives with a pre-qualified loan offering. Loan repayment amount will be collected from the daily settlement of merchant with Paytm and if the merchant is able to repay the loan then there will be no prepayment charges. 
Bhavesh Gupta, CEO – Lending, Paytm said, “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.”
The company has digitised the entire process of loan starting from the application procedure to the approval to disbursal without additional documents which is required in partnership with banks and NBFCs (Non-Banking Financial Company). It is on a mission for providing instant credit for those who don’t have access to loans from traditional banks due to the lack of collateral or credit score.