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Google Pay for Business app plans to add an SMB loan feature in India


Big Tech's Positioning in Financial Services

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The multinational tech behemoth has announced its plans to offer loans to small- and medium-sized businesses (SMBs) via its Google Pay for Business app and in partnership with financial institutions (FIs), per TechCrunch. Launched in India last year, the app is already being used by 3 million SMBs. In addition, the tech giant also announced the Google Small Business hub, which will bring all of Google’s SMB-related services on one platform.

The loan feature is one of a host of SMB-related services Google has launched in India in recent years:

Google My Business: This app allows SMBs to set up a free business profile, including pictures and contact details, which is then listed on the search engine and Google Maps. Businesses can continuously post updates on their profiles, enabling them to better connect with customers and raise awareness of their offerings.
Google Pay’s Spot: This platform enables SMBs to create a customizable digital storefront on the Google Pay app. Customers can then see what the business sells and make purchases on the platform via Google Pay.

Google’s new loan feature should be appealing to potential bank partners in India, as it can help them efficiently reach millions of SMBs and complement their analytical capabilities.

Out of the 40 million SMBs within the country, 26 million are already using Google services to improve their branding. Google’s app therefore presents an opportunity for traditional banks to quickly reach more than half of all SMBs in the country with their loan products through integration.
The Google Pay for Business app could also provide banks with more relevant data to assess SMBs’ creditworthiness. The informal nature of Indian SMBs’ operations, such as a lack of historical cash flow data, has made banks hesitant to extend credit, leading to a $240 billion credit gap — and skyrocketing digital lending in the country over the past decade as alt lenders leverage advanced technology to better analyze businesses. For example, LendingKart uses big data analytics tools and machine learning to analyze multiple data points and paint a more accurate picture of a business’s finances than traditional banking methods would. Google’s app could complement banks’ credit rating methods by providing data on a business’s transaction and sales volumes, for a more comprehensive profile of the prospective borrower. We’ve seen this in action with Goldman Sachs, which strengthened both its customer reach and loan origination process by signing an agreement with Amazon in the US earlier this year, enabling it to offer small business loans through the …read more

Source:: Business Insider

      

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