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Google Pay’s credit partnership portfolio now includes five lenders in total: DMI Finance, Indifi Technologies, ICICI Bank, Aditya Birla Finance, and Muthoot Finance
More than 80 per cent of the credit disbursed by Google Pay, in partnership with its lenders, is directed towards customers residing in Tier-II cities and beyond, due to limited access to financial institutions in these regions, a senior company executive said.
At present, the company’s partnerships with lenders cover about 13,500 pin codes, where it is able to disburse both unsecured and secured credit.
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“If we think qualitatively about it, a user in these regions has fewer bank branches and non-banking financial companies (NBFCs) to turn to. For them, digital access becomes more valuable than for those living in Tier-I cities like Delhi or Bengaluru,” said Sharath Bulusu, director of product management at Google Pay, in an interaction with Business Standard.
At the 10th edition of Google for India, the fintech major announced credit partnerships with two lenders: Aditya Birla Finance Limited for unsecured loans and Muthoot Finance for gold-backed secured credit.
The partnership with Muthoot will enable Google Pay to extend collateral-based credit for the first time on the platform.
“It enables users who do not have a credit history to access loans in a safe and formal manner. For users who do have some credit history, they can secure better terms if they opt for a collateralised loan, as the lender’s risk is lower,” he added.
As part of the partnership with Muthoot, Google Pay will originate loans and facilitate the application flow, while the lender will handle underwriting and collections.
Among fintechs, there is growing interest in extending secured loans to customers after the Reserve Bank of India (RBI) increased risk weights on unsecured credit last year.
“Even independent of this, there is a place for both secured and unsecured loans in the market. For a set of customers with the same criteria and credit requirements, if someone is willing to submit collateral, a lender will provide a lower interest rate, as they have something to fall back on in addition to credit history,” Bulusu added.
Google Pay’s credit partnership portfolio now includes five lenders in total: DMI Finance, Indifi Technologies, ICICI Bank, Aditya Birla Finance, and Muthoot Finance.
The company will also extend a text- and audio-based support agent for credit products, powered by Google’s flagship Gemini AI (artificial intelligence) models.
The company plans to roll out more regional languages to the agent beyond English.
“Google Pay’s AI-powered support guide can now answer users’ questions about repayment cycles, eligibility criteria, EMIs, and more, while providing links to the relevant detailed terms and conditions,” the company said in a blog post on Thursday.
First Published: Oct 03 2024 | 2:34 PM IST
