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Bangalore : PhonePe, a leading digital payments platform, has unveiled its Merchant lending platform, providing banks and non-banking financial companies (NBFCs) with a digital and seamless avenue to extend credit to its expansive merchant network of over 35 million. This strategic move underscores PhonePe’s commitment to promoting financial inclusion for small and medium enterprises (SMEs).

The SME sector in India has long grappled with challenges in obtaining organized credit, impeding their growth potential. Recognizing this unmet need, PhonePe has developed an end-to-end process within its PhonePe for Business app, streamlining loan approvals from lending partners in a matter of minutes. Leveraging its robust distribution network and advanced technology capabilities, PhonePe collaborates with lending partners to facilitate underwriting, disbursals, and loan collection.

Since May 2023, PhonePe has successfully facilitated the disbursal of more than 20,000 loans through trusted NBFC partners. This early success highlights the substantial demand for credit among SMEs and underscores the effectiveness of PhonePe’s Marketplace model in meeting this need. One key factor setting PhonePe apart is its close engagement with merchants in the payments sector. The company’s deep understanding of merchant transactional behavior serves as a robust validation of their business health. Additionally, PhonePe is actively developing its own credit scoring system using cutting-edge data science models, further enhancing the lending process and empowering SMEs to access credit more easily.

Hemant Gala, Vice President of Financial Services at PhonePe, expressed enthusiasm about the launch, stating, “Promoting financial inclusion lies at the core of PhonePe’s mission. We are thrilled to introduce Merchant Lending on our platform, utilizing the Marketplace Model to grant SMEs and MSMEs access to organized credit, fostering their growth. By acting as a catalyst for the financial empowerment of MSMEs and SMEs, PhonePe takes pride in contributing to the overall development of the economy and driving sustainable progress.”