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Instamojo now offers small ticket loans via WhatsApp
Bangalore based startup Instamojo is more or less known for bringing micro-businesses online and providing them with a payments platform. Last week, Instamojo, announced that it would start offering ‘sachet loans’ to these micro-businesses via WhatsApp.
The pilot program was already live for 138 people, and as per the company, over 292 loans amounting to Rs. 19 lakhs were sanctioned in about three weeks. The average size of ‘loan ticket’ was Rs 6,355.
These sachet loans are small-credit against merchant on-the-platform sales. Eligibility for these loans depends on the merchant’s transaction history. Every merchant starts with a small limit, and the limit increases as the merchant collects more payments via Instamojo.
The merchants who are eligible get a WhatsApp notification, which tells them they are eligible for a loan of a certain amount. Once the merchant accepts the offer, the money gets disbursed immediately. The interest rate on these loans varies between 0.25-1%. If a merchant pays the next day, it’s 0.25% for the same day payout it’s 0.5-0.75%, while for an instant payout, it’s 1%. The borrowers have to repay the loan in three days.
Since the breakdown of COVID-19, companies have taken a financial hit. The majority of the businesses have been doing little or no business during this period, but digital firms catering to MSMEs have started recovering at a decent rate. Although Instamojo claimed a 20% surge in gross profit in April as compared to the previous month, they have also announced pay cuts for about two-thirds of its workforce.
Instamojo says that the number of people signing up for loans has gone up. With WhatsApp as a loan-disbursement channel, the number is bound to grow since the economy is now stabilizing and everyone in this country is comfortable with the Facebook-owned messaging service.
