Flipkart gets RBI nod to lend directly, becomes first Indian e-com giant with NBFC licence

Walmart's Flipkart has successfully secured a lending licence from the Reserve Bank of India (RBI), allowing it to offer loans directly to customers and sellers on its platform. This marks the first instance of a major e-commerce platform in India being granted a non-bank finance company (NBFC) licence, a significant move in the financial services sector, news agency Reuters reported.

The licence, awarded on March 13, permits Flipkart to provide loans without the capacity to accept deposits, thus paving the way for a more integrated financial solution directly through its platform. This development is expected to enhance Flipkart's ability to offer tailored financial products to its vast user base, potentially transforming the landscape of e-commerce in India.

Currently, most e-commerce companies, including Flipkart, provide personal loans through partnerships with banks such as Axis Bank and IDFC Bank. However, this new licence will enable Flipkart to transition to a more lucrative direct lending model. According to sources, Flipkart intends to offer loans directly via its e-commerce site as well as its fintech application, super.money, while also extending financing options to sellers. The commencement of these operations is expected in a few months. This strategic shift could lead to a more seamless experience for users, who can access financial services directly through the platform they already use for shopping.

Flipkart, valued at $37 billion following a $1 billion funding round led by Walmart in 2024, is aiming to enhance its financial services capability through this licence. This strategic move also supports Walmart's ambition to take Flipkart public. The e-commerce giant, which is shifting its holding company from Singapore to India, has been a key part of Walmart's portfolio since it acquired a controlling stake in 2018. This move is part of a broader strategy to consolidate its operations within India, aligning with local regulations and market dynamics.

Competition in the sector is increasing, with rivals like Amazon also venturing into the financial domain. Earlier this year, Amazon acquired Axio, a Bengaluru-based non-bank lender, but is awaiting clearance from the central bank. Flipkart's new licence could offer it a competitive edge by streamlining its lending operations and potentially improving profitability. This competitive landscape underscores the growing importance of financial services as a differentiator in the e-commerce space.

The RBI's approval comes after Flipkart's application in 2022, reflecting a growing trend of integrating financial services within e-commerce platforms. The company is currently finalising internal processes and appointing key management personnel to ensure a smooth launch of its lending operations. The official launch remains contingent upon these preparations. This meticulous planning highlights the complexity and significance of launching financial services within a retail platform.

As Flipkart prepares to roll out its direct lending services, this development signifies a broader shift in how e-commerce companies in India are leveraging financial licences to expand their service offerings. This move could significantly alter the landscape of online retail, providing consumers with more flexible financial options and enhancing the overall customer experience on digital platforms. The integration of financial services is poised to become a key component of the value proposition offered by e-commerce giants, potentially setting new standards for customer engagement and satisfaction.