PayNearby Partners with Centrum Microcredit to Facilitate Unsecured Business Loans to Retailers
As part of its Store Owner Benefits program, PayNearby, India’s leading remote digital banking and payments network, has partnered with Centrum Microcredit Limited, the microfinance arm of the Centrum Group, to facilitate unsecured business loans to its retail partners. As part of the reconciliation, loan requirements will come from PayNearby’s extensive retail network and will be disbursed by Centrum Microcredit Limited. The solution aims to fortify and drive business growth for PayNearby’s retail partners, especially in these difficult times when businesses are struggling to stay afloat due to the economic fallout from COVID 19.
The partnership will aim to strengthen the common goals of the two organizations, which are committed to enabling financial inclusion and the economic well-being of retailers. Retailers often need low-cost, timely working capital loans for short-term mandates in order to keep their operations operational. More often than not, due to lack of collateral or being new to credit, these retailers mainly rely on alternative options such as local lenders or loan sharks instead of traditional options such as banks or financial institutions. But loans from these informal sources carry exorbitant interest rates, pushing them further into an inevitable vicious cycle.
This partnership will allow PayNearby to facilitate competitive lending solutions to its retailers who may not otherwise be eligible for formal lending options. PayNearby is committed to ensuring that digital Pradhans do not face a cash flow crisis of any kind and continue to offer their services, thereby creating a thriving ecosystem for the local community.
The partnership will help Centrum leverage PayNearby’s rich data acquired by processing billions of transactions per day, adding scale and efficiency to their lending operations. PayNearby has an innovative and robust technology backend platform that reaches deep country roots using advanced analytics, AI and machine learning to score thin credit files and create experiences of simple and effective microcredit for its retailers, allowing them to obtain loans at the click of a button. Loans disbursed to traders will be on a pre-qualified basis. To enable this, PayNearby has developed a proprietary scorecard based on retailer transaction data with a set of prequalification criteria agreed upon by Centrum; and a credit rules engine based on the preselection of eligible retailers.
The partnership will give Centrum access to a deep-rooted network of retailers, with rich transactional data and hassle-free last mile access through PayNearby’s stable technology platform. With the big data available at PayNearby and the strength of a distribution network on the ground, Centrum will provide retailers with the right lending solutions to meet their growth and livelihood needs.
In addition, this partnership, between Pay Near and Centrum Microcredit, has followed a digital strategy throughout its product journey. It currently finances low-cost unsecured loans between ₹ 25,000 to ₹ 1 lakh with terms ranging from 6 months to 24 months. The turnaround time is 48 hours, even for new credit, and the entire loan life cycle from inception to disbursement is fully digital. Along with the convenience of applying for a loan, the partnership will ensure that retailers build a strong credit history during this journey and, at some point, become eligible to take on larger, longer term bank loans.
Announcing the merger, Anand Kumar Bajaj, Founder, CEO and CEO of PayNearby, said: “PayNearby, as an entity, champions the cause of financial inclusion in the country. However, the goal of inclusion financial is incomplete until our retailers have access to credit We have provided our retailers with access to livelihoods, insurance and savings through various products across the financial services spectrum. The only missing item was access to credit. In our efforts to make credit available to our retailers at affordable rates, we have partnered with Centrum Microcredit Limited. With substantial data from PayNearby, as well as Centrum, we hope to solve the working capital credit problem for our retailers through these micro business loans.
Our digital Pradhans are our backbone. They have shown great resilience throughout the pandemic by providing uninterrupted service to ensure citizens have access to essential financial resources. In these difficult times, we are committed to strengthening them in their minds and with financial support to make their businesses run like never before. “
Speaking on the partnership, Prashant Thakker, Executive Director and CEO of Centrum Microcredit Limited, said: “Financial inclusion is a key area for us. Our partnership with PayNearby adds to our vision of having a positive, social impact. and economical in the life of retailers by providing unsecured working capital credit to ensure the uninterrupted functioning of their operations. Through this initiative, we will be able to integrate many small retailers into the credit fold. will also help to diversify our business geographically and expand our offering in terms of occupancy and loan repayment model.We are excited to use PayNearby’s rich data and extensive network of retailers to make an India’s dream come true. financially inclusive. “
Within six weeks of launch, the company received over 270 applications on its platform and disbursed loans worth ₹ 36 lakhs to over 60 retailers.
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