The Open Network for Digital Commerce (ONDC) is reportedly planning to integrate banks such as HDFC Bank, IDFC First Bank, and Karnataka Bank, alongside fintech firms like Fibe.
According to a report by The Economic Times, this integration is likely to take place in the next few months. It will allow the participating banks to offer unsecured personal loans and GST-based invoice loans, particularly targeting small merchants and retailers in financially underserved areas across the country.
This development coincides with ONDC’s early pilot programs for credit disbursals, which involve integrating Tata Group’s super app Tata Neu and credit marketplace Paisabazaar to connect customers with lenders like DMI Finance and Aditya Birla Finance.
IDFC First Bank told ET that it offers account services and reconciliation support for participants in the ONDC network. These services can be integrated with different network participants to help with reconciling transactions and performing settlement activities.
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B2B Credit Platform in Development
ONDC is planning to launch business-to-business credit services, providing large loans ranging from Rs 1 crore to Rs 1.5 crore. These services are still in the development phase and will be built after the consumer and business credit services are operational.
The guidelines for these services are set to be released in August, with a pilot launch planned for December.
ONDC is also looking into offering small, short-term loans to customers, including farmers and merchants, using alternative data from platforms like dairy tech startup Stellapps, retail intelligence platform Bizom, and agritech startup Absolute.
This data, along with banking details from account aggregators and credit bureau information, will help lenders evaluate customers’ creditworthiness. These platforms are currently being integrated into ONDC.
In addition to credit, ONDC is expanding into insurance and investment segments. It began by offering marine, health, and motor insurance and is now developing a protocol for life insurance.
Also Read: SBI, ICICI and HDFC Bank Credit Card Rules That Are Changing July 2024 Onwards
The platform has conducted a pilot transaction for marine insurance with InsuranceDekho and Bajaj Allianz. On the investment side, ONDC plans to launch investment products within a month, starting with mutual funds.
ONDC currently has five loan service providers, including EasyPay, Tata Digital, and Paisabazaar, as well as two lenders, DMI Finance and Aditya Birla Finance, on its platform.
Small businesses often have diverse credit needs and end up borrowing at high interest rates. With ONDC, the process is fully automated, allowing them to secure loans at lower rates and improve their CIBIL scores.
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