State-backed network Open Network for Digital Commerce (ONDC) has bolstered its fintech play with the launch of credit offerings. The platform on Thursday launched a credit facility that enables customers to access fully digital and paperless loans in just six minutes. ONDC, however, plans to launch insurance and mutual fund offerings in the next two months.
For the credit facility, 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.
“After launching credit, we may do the same for insurance and mutual funds. We may see insurance and mutual fund providers coming on the platform in the next few months,” T Koshy, MD & CEO, ONDC told FE on the sidelines of an event held to launch credit services.
Following the launch of unsecured loans, ONDC Network plans to introduce GST invoice financing loans by September end 2024. Subsequent products will include purchase financing for individuals and sole proprietors, as well as working capital lines for partnerships and private limited companies. The platform is also planning to offer farmers’ loans and credit cards but at a later stage.
The addition of more services and players will help boost the transactions on the platform.
“We have already crossed 12 million transactions in July and we expect to touch 30 to 40 million transactions per month by the end of this financial year,” said Koshy.
Koshy said that there is a strong pipeline of buyer applications with interest in expanding this digital credit model, such as Mobikwik, Rupeeboss and Samridh.ai, and lenders such as HDFC Bank, IDFC First Bank, Faircent, Pahal Finance, Fibe, Tata Capital, Kotak Mahindra Bank, Axis Finance, FTCash and Central Bank of India.
“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,” Koshy said. “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. This goes well with ONDC’s vision of inclusion as well, now extending to Financial Inclusion” he added.
To deliver loans digitally, paperlessly, and in just six minutes, the entire credit process integrates four digital public goods: Account Aggregator for data, DigiLocker/Aadhaar for KYC, eNACH/eMandate for repayment, and Aadhaar eSign for agreement signing. This approach is set to extend credit access to remote and underserved areas of the country, revolutionising digital lending in India.