PayNearby ties up with Centrum Microcredit to facilitate unsecured business loans to small retailers

As part of its Shop Owners Benefit Program, PayNearby, India’s leading branchless banking and digital payments network, has tied up with Centrum Microcredit Limited, the micro finance arm of the Centrum Group, to facilitate unsecured business loans to its retail partners. As part of the tie-up, loan requirements will be sourced through PayNearby’s vast network of retailers and will be disbursed by Centrum Microcredit Limited. The solution is aimed at fortifying and driving the business growth of PayNearby’s retail partners, especially in these challenging times where businesses are struggling to stay afloat due to the economic fallout of COVID 19, PayNearby said in a company statement. The partnership will work towards enhancing the shared goals of the two organizations, which are committed to enabling financial inclusiveness and the economic wellbeing of the retailers, the statement said. 

This partnership will allow PayNearby to facilitate competitive lending solutions to its retailers who otherwise may not be eligible for formal lending options. PayNearby is determined to ensure that the Digital Pradhans do not face a cash crunch of any kind and continue to offer their services, thus creating a thriving ecosystem for the local community, the company said in its statement.

The partnership will help Centrum harness PayNearby’s rich data acquired through processing billions of transactions per day, adding scale and efficiency to their lending business. PayNearby has an innovative and robust technology backend platform that reaches out to the deep roots of the country using advanced analytics, AI and machine learning to score thin credit files and create simple and efficient micro lending experiences for its retailers, enabling them to secure loans at the click of a button. The loans disbursed to the merchants will be on a pre-qualified basis. To enable this, PayNearby has developed a proprietary scorecard based on the transaction data of the retailers along with a set of agreed pre-qualifying criteria of Centrum; and a credit rule engine based on which eligible retailers are shortlisted. 

Additionally, this partnership, between Pay Nearby and Centrum Microcredit, has followed a digital-first strategy in its entire product journey. It is currently funding small-ticket, unsecured loans between ₹25,000 to ₹ 1 lakh with tenure ranging from 6 months to 24 months. The turn-around time is 48 hours even for the new-to-credit and the entire life cycle of the loan starting from origination to disbursement is completely digital. Along with the convenience of applying for a loan, the partnership will ensure that retailers build a strong credit history in this journey and at a certain stage become eligible to take bigger and longer duration loans from banks.

 Announcing the tie-up, Anand Kumar Bajaj, Founder, MD & CEO, PayNearby said, “PayNearby as an entity has been championing the cause of financial inclusion in the country. However, the objective of financial inclusion is incomplete until our retailers get access to credit. We have given our retailers access to livelihood, access to insurance and access to savings with various products in the financial services spectrum. In our endeavour to making credit available to our retailers at affordable interest rates, we have partnered with Centrum Microcredit Limited. Along with PayNearby’s substantial data, together with Centrum, we are hopeful of addressing the issue of working capital credit for our retailers through these micro-enterprise loans.”

Speaking on the partnership, Prashant Thakker, Executive Director & CEO, Centrum Microcredit Limited said, “Financial inclusion is a key focus area for us. Our partnership with PayNearby adds to our vision of making a positive, social and economic impact in the lives of retailers by providing unsecured working capital credit to ensure their business functions uninterruptedly. With this initiative, we will be able to bring many small retailers into the mainstream credit fold. This will also help us to diversify our operations geographically and expand our offering in terms of tenure and repayment model of loans. We are excited to call on PayNearby’s rich data and massive retailer network to fulfill the dream of a financially inclusive India.” 

Within six weeks of the launch, the company has reportedly received over 270 applications on its platform and has disbursed loans worth ₹36 lakhs to more than 60 retailers.