ONDC enters financial services market with working capital loans

These working capital loans will be fully digital, paperless, and available in just 6 minutes.

The Open Network for Digital Commerce (ONDC) is making its debut in financial services with the launch of a fully digital, paperless credit offering on August 22.

The working capital loans, which can be processed in just six minutes, are part of ONDC's broader push into interoperable financial services.

So far, ONDC has integrated nine buyer applications (also known as Lending Service Providers) and three lenders.

These buyer applications include Easypay, Paisabazaar, Tata Digital, Invoicepe, Cliniq360, Zyapaar, Indipe, Tyreplex, and Paynearby. The lenders include Aditya Birla Finance, DMI Finance, and Karnataka Bank.

Even individual customers, both salaried and self-employed, will be able to access to small ticket unsecured credit line.

“By integrating multiple digital systems into a single process, we are simplifying the borrowing experience and expanding credit availability even for remote and underserved regions. This innovation not only reduces operational costs for both lenders and buyer applications but also enhances financial inclusion, fostering economic growth and opportunity across the country,” ONDC managing director and chief executive T Koshy said.

ONDC is in talks with other buyer applications interested in expanding this digital credit model, such as Mobikwik, Rupeeboss, and Samridh.ai, as well as lenders like HDFC Bank, IDFC First Bank, Faircent, Pahal Finance, Fibe, Tata Capital, Kotak Mahindra Bank, Axis Finance, FTCash, and Central Bank of India.

ONDC also plans to introduce GST invoice financing loans by the end of September. A lineup of other products is also in development, including purchase financing for individuals and sole proprietors, as well as working capital lines for partnerships and private limited companies.

Speaking the launch event of the unsecured credit line, Hrushikesh Mehta, SVP- financial services, ONDC said, “We are starting with working capital, then we will have purchase financing, B2B credit, post that we can have credit cards. If we are able to launch all of these over the next 18 months, we’ll have full suite of financial offerings.”

ONDC began piloting these solutions in January this year, starting with its credit offering. The network is also working on expanding into insurance and wealth management, Moneycontrol reported earlier.

According to the Economic Survey 2024, transactions on the ONDC have surged past 68 million since its inception in 2022. As of June 2024, it saw a 12 percent month-on-month growth in transactions to 9.95 million. In July, ONDC did 12 million transactions, said Koshy.