The company, which competes with Alibaba-backed Paytm, started pilot on the project a few weeks back and has already given loans to about 25,000 users.
"These are micro loans, about Rs 500-2,500, given to users when they are running short on balance while making a purchase. We are happy with the product, the repayment rates are around 97 per cent. We are now looking at expanding this," MobiKwik co-founder Upasana Taku told PTI.
MobiKwik is in process of adding 10-12 other similar banks and non-banking finance companies for the service.
"Over the next few months, we expect to give out credit to 2-3 lakh users," she said.
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Asked about the process of selection, Taku said the company assesses the credit worthiness of the wallet users based on the previous transaction history.
"Based on how much money the user loads on to the wallet and his purchase history, we determine the credit worthiness. These small loans is a way of boosting the user's confidence in using digital payments," she said.
Apart from loans, Mobikwik is also working on bringing board users that do not have cards or bank accounts.
"We are building a network of cash pick-up services in Delhi, Mumbai, Bengaluru and Jaipur. We already have 80,000 outlets where consumers can go and deposit cash on to the Mobikwik wallet," Taku said.
She added that Mobikwik also gives users an option to request cash pick ups.
"We are already seeing about Rs 7-8 crore worth of such transactions and expect this to see a 10X growth in the near future," she said.