Few other lending institutions, including Aditya Birla Finance and Capital First, have also indicated interest in joining as partners. This move marks the company intention to get more out of its ecommerce segment.
The small loans range between Rs 10,000 to Rs 1 lakh and their amount can increase later based on the eligibility criteria and the working capital needs of merchants. The incentives target kirana stores, auto and taxi drivers and milk cooperatives based on their payments history.
Availability of unsecured loans at low interest rates has been a challenge for small merchants, forcing them to borrow through high-cost methods like chit funds, according to thetechportal.com. By accepting payments through Paytm consistently, merchants can get a digital footprint at zero cost and have access to low-interest loans.
Paytm is betting big on a huge number of offline merchants who can use its platform to accept cashless payments. Since 2015, it has been rapidly expanding its network to these merchants.
According to the company, around four lakh offline merchants already accept payments through Paytm. As per the company, it will cross 1 million merchants by December 2016.
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