PayTM Increases Its Micro-Credit Foray
At a time when the other companies are shying
away from providing microcredit, PayTM is all set to harness the increased
credit demand. The Softbank and Alipay backed, India’s most valued FinTech
company PayTM has tied up with non-banking lenders Arthimpact Digital Loans and
Clix Capital to extend into the digital lending market while the other more
traditional are reluctant to take risks because of the stress in various the
consumer segments that was caused due to the lockdown which was imposed because
of the global pandemic.
The company will leverage the transaction data
of its users to assign them a credit limit for purchasing daily goods and will
also be valid for its customers that shop on PayTM Mall, Its e-commerce
venture. The elite customers will get a limit of up to INR 1 Lakh. The company
has plans to enter the space for the long term and plans to offer the service
to most of its active users over the next couple of years in stages. The
company has been expanding its Financial services portfolio by offering
insurance partnerships, providing value-added services to its merchants, etc.
As per RBI policies, the PayTM Payments Bank
will only be able to apply for a licence to convert into a small finance bank
only in 2022. The eligible customers will be chosen using a machine learning
model that will leverage the rich transaction data within the ecosystem of the
company itself. While the company does not plan to charge any activation fee or
annual fee, monthly convenience charges will be levied by the user of postpaid
services. The company is looking at the situation as an opportunity to grow in
the space.
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