August 23, 2024
ONDC plans to introduce insurance and mutual fund products within the next two months, expanding its financial services portfolio
The platform has already launched six-minute digital loans, offering unsecured credit to salaried and non-salaried customers
ONDC's new digital loan offering integrates with nine buyer applications and three lenders, streamlining the borrowing process and enhancing financial inclusion
Since its inception in 2022, ONDC has processed over 68 million transactions, with a notable increase in activity in June and July 2024
The Open Network for Digital Commerce (ONDC), a platform built on open-source technology, is set to expand its financial services by launching insurance and mutual fund products within the next two months. Additionally, ONDC has partnered with Mastercard to develop protocols for introducing credit cards on its platform, further diversifying its offerings.
In a significant move towards enhancing financial accessibility, ONDC has already introduced six-minute digital loans. These loans, which offer unsecured credit to salaried and non-salaried customers, mark a step forward in providing quick and easy access to funds. The new loan service is integrated with nine buyer applications, also known as Lending Service Providers, and three lenders, including Aditya Birla Finance, DMI Finance, and Karnataka Bank.
ONDC CEO T Koshy highlighted the platform’s progress, mentioning that a marine insurance app has been deployed, with more insurers joining soon. Health insurance services are live but lack a licensed partner, while motor insurance is expected to launch within the next month. Mutual funds are also scheduled to go live next month, with the initial goal of reaching 100-200 transactions.
The platform is also considering integrating credit cards into its suite of financial products. Although a specific launch date has not been set, Hrushikesh Mehta, Senior Vice President for Financial Services at ONDC, noted that Mastercard is actively participating in developing protocols for the credit card rollout.
Incorporated on December 31, 2021, ONDC is a Section 8 company under the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry. It aims to create a facilitative model that revolutionises digital commerce, with a strong focus on expanding retail e-commerce penetration across India.
On Thursday, ONDC’s fully digital and paperless loan service was officially launched, allowing customers to access loans in just six minutes. This new offering simplifies borrowing by integrating multiple digital systems into one process, thereby reducing operational costs for lenders and buyer applications. Koshy emphasised that this innovation enhances financial inclusion and fosters economic growth and opportunity across the country, particularly in remote and underserved regions.
The Economic Survey 2024 revealed that ONDC transactions have surged past 68 million since the platform’s inception in 2022. As of June 2024, the platform experienced a 12% month-on-month transaction growth, reaching 9.95 million. In July, according to Koshy, ONDC processed 12 million transactions.
Koshy also underscored ONDC’s role in preventing market concentration and ensuring small businesses have a fair chance to compete. The network, he explained, is designed to enable any buyer to access the best possible deals on goods and services, in contrast to typical platforms that favour large suppliers, leading to a network effect that marginalises smaller businesses. His comments come after Union Commerce Minister Piyush Goyal raised concerns about the growing dominance of e-commerce giants like Amazon
Source: Economic Times