ONDC introduces working capital loans to the financial services industry

With the introduction of a totally digital, paperless credit product, the Open Network for Digital Commerce (ONDC) is making its debut in the financial services industry. The ONDC's larger initiative to promote interoperable financial services includes the working capital loans, which can be completed in as little as six minutes.

ONDC has integrated nine buyer applications including Easypay, Paisabazaar, Tata Digital, Invoicepe, Cliniq360, Zyapaar, Indipe, Tyreplex, and Paynearby and three lenders including Aditya Birla Finance, DMI Finance, and Karnataka Bank.

To facilitate digital loan disbursement, the entire sanction credit process has been integrated using four digital public goods - Account Aggregator for data, Digilocker or Aadhaar for KYC, eNACH or eMandate for repayment and Aadhaar eSign for agreement signing.

According to the company, there are other buyer applications that are interested in expanding this digital credit model such as Mobikwik, Rupeeboss and Samridh.ai. The lenders include HDFC Bank, IDFC First Bank, Faircent, Pahal Finance, Fibe, Tata Capital, Kotak Mahindra Bank, Axis Finance, FTCash and Central Bank of India.

ONDC also plans to launch GST invoice financing loans by September, 2024. Upcoming products are purchase financing for individuals and sole proprietors, as well as working capital lines for partnerships and private limited companies.

Hrushikesh Mehta, SVP- financial services, ONDC said, “We are starting with working capital, then we will have purchase financing, B2B credit, post that we can have credit cards,” he said, adding that the Mastercard network has voluntarily agreed to partner with ONDC on credit cards. “If we are able to launch all of these over the next 18 months, we’ll have full suite of financial offerings,” Mehta said.