Paytm to offer collateral free loans to SME Merchants


Just days after Snapdeal tied up with Tata Capital to provide a helping hand to its online sellers and other online merchants, Paytm has tied up with Aditya Birla finance to offer collateral free loans to SME merchants.

Renu Satti, VP of SME business at Paytm said, “It is an agreement between a seller and a financing company. The payment towards the loan will be managed through an Escrow account. We will only provide the financing companies with the data on seller performance and create a partner network.”

Using the collateral free loan, the eCommerce companies like Snapdeal and Paytm can help their sellers to build and grow. This initiative did come from the ministry of finance which made it possible for the eCommerce companies to tie up with the banks in order to support the online sellers. This initiative doesn’t require a lot of formalities and it enables the SMEs to approach for the loans without collateral, Revenue flow, balance sheet. The things which are kept in mind include Investors profile, track record and the worth of the innovative idea.

Paytm logo latestThis, however, is not the first time Paytm is involved in such initiative. Earlier, fin-tech startup Capital Float partnered with Paytm to provide working capital to small and medium enterprises.