Paytm, a digital financial services firm, informed it aims to disburse loans worth INR 1,000 crore to merchants by March, on Monday. The company saidPaytm for Business app users will be provided with collateral-free loans under the 'Merchant Lending Program'. "We will be enabling loans of Rs 1,000 crore to businesses based on the data we have on our 17 million merchants", said the company.

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These loans would help them digitise their business and diversify their operations, to improve their efficiency and support them to join the Digital India mission," Paytm said in a statement. Paytm aims to targeted loan disbursement by March 2021. The credit worthiness of each merchant based on daily transaction patterns is analysed by Paytm and then the company offers them a collateral-free loan in partnership with non-banking finance companies and banks. "The company has today reaffirmed its commitment towards the growth of MSMEs by expanding collateral-free loans of up to Rs 5 lakh at a low-interest rate and unique daily EMI product customized for micro-merchants," the statement said. 

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The repayment is scheduled as merchant's daily settlement with Paytm and there are no prepayment charges on these loans. Paytm informs that it has processed loans worth INR 550 crore to over a lakh merchant partners in the last financial year. "With our collateral-free instant loans, we are trying to help kirana stores & other small business owners who have been left behind by the traditional banking sector and do not have easy access to loans and credit," Paytm Lending CEO Bhavesh Gupta said.

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