Paytm Plans Instant Loans Against Gold In Users’ Digital Lockers
Paytm to soon loan allow users to take loan on gold.
Paytm plans to offer loans against gold stored in its customers’ digital lockers, two months after the SoftBank Group Corp-backed company started selling the yellow metal on its e-commerce platform.
“With a couple of clicks, the gold you have can be used as a collateral to get an instant loan,” Krishna Hegde, senior vice-president of Paytm, told BloombergQuint in an interview. “Users will have the option in about three months.”
Paytm’s payments bank cannot offer credit to customers like traditional lenders, according to the Reserve Bank of India’s guideline. Hegde said the company will tie up with banks and other financial institutions for it.
One97 Communications Ltd.-promoted company has partnered MMTC-PAMP, a precious metals processing firm, to buy, sell and store 24-carat gold blocks instantly. Users have the option of storing it in a digital locker or get it delivered in the form of minted coins.
Paytm has sold over 100 kilograms of gold to around 1 lakh customers since the launch and it’s growing two-fold every month, Hegde said. Customers purchased the precious metal from 5,000 pin-codes in the country and are mostly 25 to 35 years old.
The e-tailer will allow users to gift gold to corporates and individuals, Hegde said. “We are also tying up with jewelers so that gold can be transferred from your locker to a jeweller at the press of a button.”
Hegde admitted that young urban consumers look at other precious metals as investment. Yet, buying gold at one's convenience still has its own advantage, he said.
