India’s mobile payment processing firm Paytm has gained significant traction in the market, especially as Alibaba eyes the company for a massive, multimillion dollar investment. And in an announcement made Friday (July 24), the company revealed that it would be looking to spread some of its financial success to help smaller companies in the nation.
Reports said Paytm has teamed up with Aditya Birla Finance to offer small businesses in India collateral-free loans. According to the company, it will act as the bridge connecting SMEs that need working capital with the investors willing to provide it.
“It is an agreement between a seller and a financing company,” said Paytm VP of SME Business Renu Satti. “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.”
Reports in The Tech Bulletin highlighted how Paytm’s partnership follows shortly after Indian eCommerce conglomerate Snapdeal struck a similar deal with state-owned bank SIDBI. Both allow the small and medium-sized companies that work with Paytm and Snapdeal to access financial resources necessary to stay successful, which is a win-win for both the conglomerates and the SMEs.
Paytm has been in similar partnerships before. The company launched a collaboration with local e-lending platform Capital Float to provide SMEs with working capital loans.
The partnerships hint at the success Paytm has gained in recent months. Last April the company revealed that it surpassed the 50 million mark for consumers using its mobile wallet and, according to reports, about 16 million of those wallets are put to use every month. India is expected to become the world’s third-largest economy by 2030, researchers say, after the U.S. and China, and industry insiders have attributed this market growth to the rise and expansion of mobile and electronic payments in the country.