Jvm Pay: A merchant’s go-to bank

Recently, digital payments and lending have been the talk of the town. Small businesses have been severely affected by the pandemic, resulting in a growing need for digital banks. Many small businesses are unable to approach traditional banks for their financial needs due to a variety of restrictions, which leaves them without access to important financial services. Alternatively, digital fintech players such as us can offer end-to-end services to smaller players like MSMEs, entrepreneurs, and OPCs (one-person companies).

By offering our merchants a wide range of financial products, we aim to become the preferred bank for small merchants. These include digital payments, working capital loans, insurance, and other products.

The traditional lending vs new age lending

In the absence of proper documentation, merchants are ineligible for loans from large banks. In addition to the applicant’s undocumented finances, their inability to pledge collateral further complicates their case. Consequently, formal loan process ends up being costly to both the lenders and borrowers making the traditional lending model obsolete and purposeless for MSMEs.

As a rule, small businesses turn to friends, family, or money sharks for their credit needs. There are risks associated with informal sources of credit such as high interest rates, tough repayment terms, etc. Fintech has changed consumer behavior with more businesses accepting the idea of digital borrowing.

Digital payments have grown in popularity in recent years because Indian merchants have grown comfortable using digital systems. According to a report by Omidyar Network and BCG, 30% of MSMEs in India showed interest and were willing to avail digital lending if given proper assistance^[1]. Since Indian merchants have become more comfortable using digital solutions, digital payments have grown in popularity. According to BCG, 30% of MSMEs in India indicated an interest and were willing to avail of digital lending if provided with proper support[1]. It is estimated that by 2023, MSME digital lending will grow ten to fifteen fold to reach ₹6-7 lakh crore in annual disbursements. Digital credit is set to transform lending in India within the next few years, bringing millions of small merchants, businesses, and kirana stores into the formal market. Businesses with a revenue of less than $10 lakh per year are increasingly using digital platforms to reach new customers, and this could be another target segment for fintechs.

The reason why digital lending is not so cumbersome

KYC is done digitally in the digital lending space, so turnaround time is shortened. As a result, manual verification is eliminated, reducing human error and bias and ensuring a faster closing. When it comes to creditworthiness of the merchant, payments are delayed. Our company uses transactions to understand the financial health and needs of its clients. We use the transaction data to assess the credit health of the company and to make loans accordingly.

We are able to deliver large volumes of small loans through our low-cost working model. Due to our 100% digital model, we are able to service merchant partners across the country, since we do not need to have a physical presence. Digital enables us to reach unbanked and underbanked merchants and empower them. The merchant can choose to pay back in daily installments when it comes to recollection. JVM PAY lending product requires no collateral and minimal paperwork, making it an absolute steal deal for merchants. The quick disbursement provides JVM PAY a competitive advantage over traditional banks, which often take weeks or even months to process loans, provide approvals, and disburse loans.

 In March 2021, JVM PAY already provided loans to over 1.5 lac merchants. In the first month since the launch of digital lending, over Rs. 1200 crore have been disbursed. By scaling this up 8-10x, it will address the credit problems of millions of new merchants.

Now, businesses in the digital lending space have a friend and a bank in one – JVM PAY.

Make sure you jump on the bandwagon of digital lending, and choose the right partner!