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Google Pay enables online loans for small businesses, partners with digital lending app FlexiLoans

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Google had earlier this year announced that it will invest $15 million to support SMEs in India.

Credit and Finance for MSMEs: Google’s payment app for small businesses, others — Google Pay for Business has now enabled small merchants to access credit through its tie-up with the digital lending platform for MSMEs FlexiLoans. The latter is also looking to disburse loans to over 50,000 small businesses in the next 12 months with this collaboration. Credit lending to a majority of MSMEs in multiple sectors has been severely impacted because of the pandemic and following lockdowns. Importantly, credit deployed by banks to micro and small enterprises (MSEs) during April this year had recorded negative year-on-year growth of minus 2.2 per cent for the first time since Covid struck last year, the latest data by the Reserve Bank of India showed. Banks had deployed Rs 10.60 lakh crore in April, down from Rs 10.84 lakh crore in April 2020.

“Business loans to merchants via Google Pay for Business have been kicked off with Flexiloans. We will add more partners to the slate in the coming months…Besides payments, Google Pay for Business merchants can create online stores, manage ledger for customer balances, as well as avail credit in a few taps,” Google Pay told Financial Express Online in a statement.

FlexiLoans said it is the first lender to go live on the Google Pay platform. The company said it has disbursed unsecured business loans worth more than Rs 1,000 crore over the last four years and has access to over 5 million MSMEs in the country. Loan applications are largely from Tier III and Tier IV. FlexiLoans has targeted annualized disbursal run-rate of over Rs 1,000 crore in a single year. “The timing (of collaboration) is also right given the hardships that this sector has faced during the pandemic. Google Pay has been at the forefront of merchant payments and we hope to offer every Google Pay merchant a secure and digital borrowing experience,” said Abhishek Kothari, Co-Founder, FlexiLoans.com.

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According to the World Bank estimates, the credit gap for Indian MSMEs is at $380 billion and the market for digital or online lending. The value of digital lending in India had hit the $75 billion mark in 2018 and by 2023, the digital lending value is likely to be increased to around $350 billion, as per Statista. FlexiLoans competes with Lendingkart, Indifi, Ziploan, BharatPe, Razorpay, etc.

In order to ease the credit crunch among Covid-hit MSMEs, the government had last week enhanced the corpus of the Emergency Credit Line Guarantee Scheme (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 had earlier this year announced that it will invest $15 million to support SMEs in India for which it is in discussions with local partners. The search giant had announced a $200 million investment as part of its more than $800 million commitment to support small businesses globally amid Covid. The company had also launched Grow with Google Small Business Hub last year to offers digital tools to small businesses for their digital adoption “go digital, maintain business continuity and get access to helpful resources like quick help videos, support pages to learn digital skill,” Google had said last year.

This story was updated with comments from Google Pay.



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Bellie Brownhttps://businesstimes.org
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