Paytm on Wednesday said it will help provide instant digital loans up to Rs 2 lakhs to salaried individuals, small business owners and professionals via banks and NBFCs, applications for which will be cleared in less than two minutes.
The move comes on the heels of a directive by the Reserve Bank of India that warned small businesses and individuals against borrowing from unauthorised digital lending apps, and is expected to bolster the startup's consumer finance business.
Paytm said the loan service, offered via banks and NBFCs and facilitated by the startup, will be available to users at all times of the day, throughout the year, and will be disbursed digitally. The loan decision will be based on the user's credit score, as well as their purchase patterns.
"Our aim is to become a growth enabler for India's aspiring youth and young professionals to help them become self-reliant," said Bhavesh Gupta, CEO of Paytm Lending, in a press statement.
The Noida-based fintech major has partnered with several NBFCs to facilitate the loans, and has already rolled out credit lines to over 400 users in the beta phase. It aims to provide its service to over a million users by the end of the fiscal year, the startup said.
The short to medium-term loans come with a flexible repayment tenure, and can be availed directly from the flagship Paytm app, the startup added.
Paytm joins a plethora of other fintech companies in India facilitating quick credit services that ensure loan disbursals without too much paperwork - a massive advantage over traditional institutional banks.
Vijay Shekhar Sharma owned-One 97 Communications Ltd, which also operates Paytm, reported a 1.4 percent rise in consolidated revenue in FY 2019-2020. Its net losses totalled Rs 2,942 crore.
The company raised over Rs 5,000 crore through equity share placements during the financial year.
Edited by Anju Narayanan