Paytm plans to offer loans for gold stored in its customers’ digital lockers, two months after the SoftBank Group Corp-backed company began selling the yellow metal on its e-commerce platform.
“With a few clicks, the gold you have can be used as 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 payment bank cannot offer credit to customers like traditional lenders, according to the Reserve Bank of India guideline. Hegde said the company will partner with banks and other financial institutions for this.
The company promoted by One97 Communications Ltd. has partnered with MMTC-PAMP, a precious metals processing company, to instantly buy, sell and store blocks of 24k gold. Users have the option of storing it in a digital locker or having it delivered as minted coins.
Paytm has sold over 100 kilograms of gold to around 1 lakh of customers since launch and it’s doubling every month, Hegde said. Customers have purchased the precious metal from 5,000 pin codes in the country and are mostly between the ages of 25 and 35.
The e-trader will allow users to offer gold to businesses and individuals, Hegde said. “We also work with jewelers so that gold can be transferred from your locker to a jeweler with the push of a button. “
Hegde admitted that young urban consumers view other precious metals as investments. Still, buying gold at your convenience always has its own advantage, he said.