ONDC to expand personal loan services to small towns
ONDC Set to Transform Digital Commerce with Enhanced Financial Access Nationwide, It aims empower businesses and individuals
New Delhi: ONDC has been instrumental in facilitating the availability of food, fashion, and electronic items this far. Now, it is gearing up to introduce personal loan facilities in the small cities and towns of the country. HDFC Bank, IDFC First Bank, and Karnataka Bank are set to join ONDC, along with several other fintech companies.
According to senior vice president Rishikesh Mehta of ONDC’s financial services division, the introduction of loans through ONDC will benefit small merchants and retailers in rural areas. As they traditionally face challenges in obtaining loans from conventional financial institutions. Similarly, access to insurance and mutual funds has been limited to Tier-1 and Tier-2 cities. A barrier that ONDC aims to break with its financial services offerings.
Typically, applying for loans involves extensive paperwork and can take days or weeks, with no guarantee of approval. However, applying online through ONDC promises approval within minutes, making it easier for banks and other financial institutions to reach more customers and simplify the loan approval process for them.
ONDC’s B2B credit services
Moreover, ONDC will also offer business-to-business (B2B) credit services, allowing for loans as large as ₹1 to ₹1.5 crores. They are currently considering these products and will roll them out following the launch of consumer and personal loan services in December.
ONDC is also exploring the possibility of providing short-term loans to farmers, merchants, and customers. Before approving loans, lenders will evaluate customers’ creditworthiness based on their ability to repay.
Apart from loans, ONDC is expanding its footprint in other categories such as insurance and investments. Two months ago, the platform launched pilot projects for health and car insurance, with companies like EasyPay, Tata Digital, and Paisabazaar already offering loan services. They are preparing a protocol for life insurance. They expect to make other investment products, including index funds and liquid funds, available within a month.
ONDC aims to revolutionize digital commerce by democratizing access to financial services across India, particularly focusing on underserved areas. With its broad range of offerings, ONDC aims to empower businesses and individuals alike, fostering financial inclusion and economic growth.