Paytm cash in fintech start-up

Mumbai, Wednesday, November 22, 2017

Paytm has picked up a stake in Mumbai-based fintech startup CreditMate.

CreditMate was set up in 2016 by Jonathan Bill, Ashish Doshi and Aditya Singh. The company enables two-wheeler dealers and financiers to provide vehicle loans to customers with no formal credit history.

Paytm, however, did not disclose the investment amount or the percentage of stake that has been picked up.

As part of the deal, Paytm will leverage CreditMate's proprietary credit and asset valuation technology and loan management system. Paytm is also creating a loan management system for its customers.

"We are constantly innovating to provide access to financial services and lending specifically targeted at the large majority of Indians who do not have access to such products," Paytm senior vice- president and CFO Madhur Deora said in a statement. He added that CreditMate is addressing the market for loans against two-wheelers through their partner dealer network for customers who might be new to credit.

"Over time, we will use CreditMate's platforms to make credit available both offline and online to our users," he said.

Bill, who is also the CEO of CreditMate, said the investment will allow the company to expand its operations, distribution, lending partnerships and technology.

CreditMate assesses the customer and the asset (two-wheeler) using proprietary credit and valuation engines. It works with licenced lending partners for whom it provides a credit recommendation and online access to a complete digital profile of the borrower and the asset to enable fast and secured lending. It has a dealer network of over 150 across Mumbai and Gujarat.

Paytm's investment comes after it raised $1.4 billion from SoftBank in May.

The funding was expected to help Paytm expand its payments bank operations as well as grow its user base and introduce more financial products for consumers.

It also comes amid experts forecasting huge potential for fintech in the lending space. Various successful start-ups in this sphere have managed to rustle up an attractive customer base comprising of MSMEs and others who have been left out by the mainstream commercial banks.

ICICI Bank recently said that it will offer short-term instant credit to its existing customers who want to make purchases worth up to Rs 20,000 through the Paytm platform. The credit provided will be interest-free for the first 45 days, after which if the money is not repaid, the customer will have to pay Rs 50 towards delayed payment fee and 3 per cent interest. It was the first tie up in the country between a commercial bank and a payments firm to offer digital credit to customers.

Reference

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