In line with its lending product, Paytm now invests in vehicle financing startup CreditMate
On Tuesday, Indian mobile payments major, Paytm, acquired a majority stake in CreditMate, a Mumbai-based startup in the lending space which focuses on enabling its dealer partners to distribute two-wheeler loans to customers with no formal credit history.
As a part of this investment, Paytm will leverage CreditMate’s proprietary credit and asset valuation technology to create a loan management system in collaboration with its lending partner for its customers.
This news comes just a week after Paytm announced its lending product, Paytm Postpaid, to enable access to instant credit for its customers for everyday commerce use-cases, ranging from movies to bill payments, flights to physical goods.
Speaking on the occasion, Madhur Deora, Senior Vice-President and Chief Financial Officer of Paytm, said,
"Top one percent of the consumers in our country have access to a wide variety of credit-related products, whereas the remaining have limited or no access. Paytm intends to change the course of the Indian financial ecosystem by enabling hundreds of millions of deserving consumers to avail long-term credit based on a proprietary loan management system that will cover small scale entrepreneurs and self-employed individuals.”
Madhur states that CreditMate will be a valuable and long-term partner towards Paytm’s effort to cater to the unorganised sector and bring inclusive financial services for the masses.
Further, about 65 percent of Creditmate customers are already Paytm users, according to the company which speaks of the ubiquity of Paytm usage and the unique opportunities to expand availability of credit in the country. Madhur adds,
“Over time, we will use Creditmate's platforms to make credit available both offline and online to our users."
Co-founded in April 2016, by Ashish Doshi, Jonathan Bill and Aditya Singh, the company is in Mumbai and focuses on financing the used two-wheeler market. In October 2016, the company had secured a seed funding of $500,000 from early stage investment firm, India Quotient.
Jonathan Bill, Co-Founder and CEO of CreditMate, was quoted as saying,
“We are delighted to welcome Paytm as an investor given the strong synergies in our vision. This will allow us to expand our operations, distribution, lending partnerships and technology investment to help a wider set of consumers to access and leverage this key life-enhancing asset is. Achieving this is both economically and emotionally rewarding for us.”
Through their product Postpaid, Paytm plans to offer its users an instant credit based on their transaction history on the platform.
On the platform, a customer can get credit limit ranging from Rs 3,000 to Rs 10,000, which can be extended to Rs 20,000 based on their usage.
Further, launched in association with ICICI Bank, Paytm Postpaid offers up to 45 days of interest-free credit to customers who want instant cash for everyday use-cases.
Earlier this month, Paytm also launched their messaging feature, Inbox, and claimed to garner close to 3 million users within two days of launch.