Digital payments player Paytm on Tuesday partnered non-banking financial company Clix Finance to offer instant digital loans to customers and merchants on its platform.

The company would offer loans to Paytm customers and merchants through "Deferred Payment or Postpaid" and "Merchant Lines" facilities.

Using proprietary Machine Learning (ML) models developed by Paytm and Clix, millions of Paytm customers and merchants will get instant completely digital loans on the Paytm platform, the company which is owned by One97 Communications Limited, said in a statement.

"We have seen an overwhelming response to Paytm postpaid and merchant lending products. With this partnership, we aim to bring our credit tested algorithmic lending products to a larger customer and merchant base, said Nitin Misra, Senior Vice President, Paytm.

Over the next few months, Clix and Paytm will introduce several new products to further enhance customer experience and meet customer demand.

"Together, we will co-create many unique and customised products that will work seamlessly to address unmet financial needs of millions of customers," said Pramod Bhasin, Founder and Chairman, Clix.

There are nearly 6 crore MSMEs in India that need to go digital.

Alibaba-backed Paytm has over 20 crore users in the country.