Payment app BharatPe on Tuesday announced extending its credit offerings for its merchants to secured loans. The company will now enable secured two-wheeler loans and Loans Against Mutual Funds (LAMF) for its more than 1.3 crore merchants in the first phase through lending partners OTO Capital for two-wheeler loans and Volt Money for LAMF. The offering would be enhanced to a multi-product and multi-lender in the next phase.
BharatPe said merchants would be able to digitally secure up to Rs 2.5 lakh to buy a two-wheeler with a repayment period between 12- 48 months. For LAMF, up to Rs 1 crore credit can be raised.
Nalin Negi, CEO, BharatPe said the new secured loan offering will “open a new monetization channel for us and also help us drive engagement with our merchants, by offering them an extensive portfolio of loan options to choose from.” The company will add new products in the secured loans category in the coming three months as it is expected to “have a significant contribution to our overall revenue in the coming months,” Negi added.
BharatPe had announced unsecured loans back in 2019 and so far has facilitated over Rs 15,000 crore in unsecured credit to its merchant partners, according to the company.
Bharat Lamba, Co-founder & CBO at Volt Money said that by providing instant loans against Mutual funds, “we are uniquely positioned to meet the short-term liquidity and working capital needs of MSMEs, thus enabling and empowering them financially.”
Currently, other payment platforms also enable secure loans for merchants on their platforms. For instance, Paytm facilitates online merchant loans of up to Rs 10 lakh while PhonePe enables up to Rs 5 lakh loan for its merchants. In October 2023, Google Pay also introduced merchant loans starting at Rs 15,000 in partnership with DMI Finance.
In FY23, BharatPe’s merchant lending vertical had reported a 129 per cent jump in loans facilitated, reaching Rs 5,339 crore.