Google Pay Enables Online Loans For Small Businesses In Partnership With The FlexiLoans Digital Loan App
Credit and financing for MSMEs: Google’s payment app for small businesses, others – Google Pay for Business has now enabled small merchants to access credit through its link to the digital lending platform for MSMEs FlexiLoans. The latter is also seeking to provide loans to more than 50,000 small businesses over the next 12 months through this collaboration. Credit lending to a majority of MSMEs in several sectors has been severely affected due to the pandemic and subsequent closings. Importantly, credit rolled out by banks to micro and small enterprises (MSEs) in April of this year saw negative year-over-year growth of minus 2.2% for the first time since Covid struck last year, the latest data from the Reserve Bank of India showed. Banks deployed Rs 10.60 lakh crore in April, compared to Rs 10.84 lakh crore in April 2020.
“Commercial loans to merchants via Google Pay for Business were launched with Flexiloans. We will be adding more partners to the list in the coming months … In addition to payments, Google Pay for Business merchants can set up online stores, manage customer balance ledger, and receive credit with just a few clicks Google Pay told Financial Express Online in a statement.
FlexiLoans said it was the first lender to go live on the Google Pay platform. The company said it has disbursed unsecured business loans worth over Rs 1,000 crore over the past four years and has access to over 5 million MSMEs nationwide. Loan requests come largely from Levels III and IV. FlexiLoans has targeted an annualized disbursement rate of over Rs 1,000 crore in a single year. “This is also a good timing (for collaboration) given the challenges this industry faced during the pandemic. Google Pay has been at the forefront of merchant payments and we hope to provide every Google Pay merchant with a secure and digital borrowing experience, ”said Abhishek Kothari, co-founder of FlexiLoans.com.
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According to World Bank estimates, the credit gap for Indian MSMEs is $ 380 billion and the market for digital or online loans. The value of digital loans in India had reached the $ 75 billion mark in 2018 and by 2023, the value of digital loans is expected to grow to around $ 350 billion, according to Statista. FlexiLoans competes with Lendingkart, Indifi, Ziploan, BharatPe, Razorpay, etc.
In order to alleviate the credit crunch among MSMEs affected by Covid, the government last week increased the body of the Emergency Credit Line Guarantee Program (ECLGS) to Rs 4.5 lakh crore from Rs 3 lakh crore earlier under the Rs 20 lakh crore Atmanirbhar Bharat package announced last year in May.
Google announced earlier this year that it will invest $ 15 million to support SMEs in India for which it is in discussion with local partners. The search giant had announced an investment of $ 200 million as part of its commitment of more than $ 800 million to support small businesses around the world amid Covid. The company also launched Grow with Google Small Business Hub last year to provide digital tools for small businesses for their digital adoption “go digital, maintain business continuity and access useful resources such as videos quick help, help pages for learning digital skills ”. Google had said last year.
This story has been updated with comments from Google Pay.