Government-backed Open Network for Digital Commerce [ONDC] was set up back in 2021, to make e-commerce access more inclusive and widespread to even small sellers and merchants.
The network has grown steadily over the years, now clocking around 12 million transactions per month. ONDC is now entering financial services space, where it now aims to offer a whole range of services, including credit, insurance and mutual funds.
On Thursday, ONDC launched fully-digital unsecured loans for salaried and unsecured individuals.
The credit offering is integrated with nine buyer applications or lending service providers and three lenders.
The 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.
To deliver the loan digitally, and in just 6 minutes, the entire credit process integrates 4 digital public goods — Account Aggregator for data, Digilocker / Aadhaar for KYC, eNACH / eMandate for repayment and Aadhaar eSign for agreement signing. ONDC says this will extend credit access to remote and underserved areas of the country revolutionizing digital lending for India.
"Why does somebody want credit? Either for buying something or a lot of it is for working capital finance from small businesses. Now that they have digitized transactions, that becomes collaterable asset. Now, with the same network, if they get access to credit, it will really complement. If they can buy risk containment products like insurance, it becomes complementary. If the same network helps them to save Rs 100 every day, it's convenient," T. Koshy, MD and CEO of ONDC told THE WEEK.
With the ONDC protocol providing a standardized framework, both lenders and buyer applications can achieve greater efficiency and broader reach, it said.
There is a strong pipeline of buyer applications with interest in expanding this digital credit model, including fintechs and banks, it added.
Following the launch of unsecured loans, ONDC plans to introduce GST invoice financing loans by September end. Other products planned include purchase financing for individuals and sole proprietors, as well as working capital lines for partnerships and private limited companies.
Farmers loans and credit cards is also on the anvil, but at a later stage.
It will also offer insurance and mutual fund products through the network.
ONDC as a commerce platform is also expected to continue to grow, with Koshy hopeful of clocking more than 30 million transactions per month by the end of March 2025.
The aspiration is one million transactions a day, said Koshy.
