Tata Neu and Paisabazaar pilot credit disbursals on ONDC

Lenders like DMI Finance and Aditya Birla Finance have joined the network

June 17, 2024

Multiple loan service platforms (LSPs) are integrating with ONDC

ONDC aims to streamline small-ticket loans in 6-10 minutes

Initial focus on unsecured personal and GST-based invoice loans

Future plans include insurance, investments, and working capital loans

Tata Group’s super app Tata Neu and credit marketplace Paisabazaar have started early pilot studies for credit disbursals through the Open Network for Digital Commerce (ONDC). Lenders like DMI Finance and Aditya Birla Finance have integrated with the ONDC network to provide loans, relying on consumer-facing applications like Tata Neu and Paisabazaar to source customers.

Five loan service platforms (LSPs) and two lenders are active on the ONDC network. The early adopter LSPs include EasyPay, Tata Digital, Paisabazaar, Cliniq360, and Invoicepe. Many more LSPs, along with numerous non-banking financial companies (NBFCs) and banks, are in the process of integrating with the network. The goal is to deliver small-ticket loans using multiple public digital goods within six to ten minutes.

ONDC, supported by an open-source protocol, aims to complete its service loop by adding financial services to its ecosystem. The network includes categories such as food, beverages, groceries, and home decor. By leveraging the account aggregator framework, ONDC can quickly fetch banking details and underwrite customers.

Customers can apply for loans on any ONDC-backed app like Tata Neu and receive offers from multiple partner lenders within minutes, with the loan getting sanctioned on the go. Tata Digital, which operates Tata Neu, did not respond to queries.

ONDC’s primary focus is on unsecured personal loans and GST-based invoice loans, catering to the needs of small merchants. However, the platform’s vision extends beyond this, with plans to expand into working capital loans. The aim is to reach last-mile retailers or consumers typically underserved by banks and NBFCs, thereby fostering financial inclusion. By formalising their data, ONDC is working towards institutionalising credit disbursal, making it accessible to all.

Pune-based EasyPay is already facilitating lender integration into the ONDC ecosystem, allowing banks and NBFCs to offer credit to small merchants. While credit is the starting point, ONDC plans to expand into insurance and investments.

Once fully operational, ONDC is poised to create a new financial ecosystem in India, similar to how the Unified Payments Interface (UPI) extended payments beyond traditional banking environments. This will open up a world of possibilities, allowing customers to access a broad range of financial services, a prospect that is both exciting and promising.

Source: Economic Times

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