Google Pay could soon start offering loans to small businesses
What's the story
Google Pay, the payments arm operated by Google, may soon start offering business loans to small and medium enterprises (SMEs) in India. The company, according to a report in The Economic Times, is in talks with several Indian lenders and is looking to launch the service by the end of this year. Here's all you need to know about it.
Plan
Plan to enable easy SME loans
Speaking to ET, Ambarish Kenghe, the Senior Director for Product Management at Google Pay, confirmed the plan to launch SME loans. He said the company is working with top Indian banks and will enable the facility to more than 3 million of its verified merchants. The loan will be available instantly but approval will depend on the creditworthiness of the applicant, like consumer loans.
Goal
Goal to help the merchants
With this offering, Kenghe emphasized, Google Pay wants to open a way for lenders to take credit and weather the ongoing financial crisis stemming from COVID-19. "We're working with our partner financial institutions to surface their loan offerings for merchants, which can be availed right within Google Pay, something that is especially pertinent in these uncertain times," he said.
Banks
Which banks are working with Google?
While Kenghe did not talk about the banks that are working with Google, we expect the company might choose the same partners that were picked for its consumer loan offering, namely HDFC Bank, ICICI Bank, Federal Bank, Axis Bank and Kotak Mahindra Bank. Also, just like consumer loans, the onus of underwriting and collection of installments would still remain on the partner banks.
Offering
One of the offerings planned for SMEs
Notably, the Google executive also said that the loan offering is just one of the many initiatives that have been planned for SMEs. The effort comes in a bid to draw small businesses, which continue to shift from offline to online for product marketing, selling, payments, and more. The developments have made India's SME sector a lucrative target for big technology giants.