Instamojo pilots sachet loans via WhatsApp for small merchants

Digital enabler and payments platform for micro-businesses, Instamojo has launched a pilot of a sachet loan via WhatsApp. The move appears to have brought encouraging results in its initial phase with Rs 19 lakh disbursal.

“Within three weeks of the launch, it helped third-party lenders to sanction 292 loans opted by 138 people where average ticket size was Rs 6,355,” said Sampad Swain, co-founder and CEO, Instamojo. 

These sachet loans are typically byte-sized credit against merchant on-the-platform sales. Eligibility for such quick loans is mainly determined by the merchant's transaction history. Every merchant starts with a small limit, and the limit may increase as the merchants collect more payments using Instamojo.

“We have recorded a 40% increase in small business owners opting for sachet loans after the announcement of covid-19 lockdown,” added Swain. 

Instamojo had rolled out credit product MojoCapital in late 2018 and the Bengaluru-based firm has allocated Rs 230 crore worth loan in the past two-and-half years.

While the majority of the businesses have been facing no or very little business, digital enablers catering to MSMEs have started recovering at a decent pace after the first two phases of the ongoing lockdown. To cope up with the crisis and extend the runway, Instamojo also announced pay cuts for two-third of its workforce. Senior employees are taking a 40% cut whereas mid-level employees were asked for a 10% cut.

Earlier this month, Instamojo claimed to register a 20% surge in gross profit in April as compared to the previous month. During the period, it also reduced its net burn by 50%.

The Kalaari-backed company had also acquired digital commerce enabler GetMeAShop. The acquisition has been helping Instamojo’s existing million-plus merchants to go online with payments, logistics and lending facilities.