The Open Network for Digital Commerce (ONDC) has entered into the financial services space by launching a fully digital and paperless loans available in just 6 minutes.
The new offering is integrated with 9 buyer applications, also known as Lending Service Providers, and 3 lenders, marking a significant milestone in ONDC Network’s mission to enhance accessibility and efficiency in credit services.
As per information shared by ONDC, the initial product of this digital lending initiative is unsecured credit for both salaried and self-employed individuals.
The buyer applications include Easypay, Paisabazaar, Tata Digital, Invoicepe, Cliniq360, Zyapaar, Indipe, Tyreplex and Paynearby. The lenders include Aditya Birla Finance, DMI Finance and Karnataka Bank.
To deliver the loan digitally, paperlessly, and in just 6 minutes, the entire credit process integrates 4 Digital Public Goods — Account Aggregator for data, Digilocker / Aadhaar for KYC, eNACH / eMandate for repayment and Aadhaar eSign for agreement signing.
This is set to extend credit access to remote and underserved areas of the country revolutionising digital lending for India, ONDC said in a statement.
Speaking on the development, T Koshy, MD & CEO, ONDC said, “This development represents a major step forward in democratising access to credit.”
“By integrating multiple digital systems into a single process, we are simplifying the borrowing experience and expanding credit availability even for remote and underserved regions. This innovation not only reduces operational costs for both lenders and buyer applications but also enhances financial inclusion, fostering economic growth and opportunity across the country,” he added.
“This goes well with ONDC’s vision of inclusion as well, now extending to Financial Inclusion.”
The new digital credit process is poised to make a substantial impact by delivering loans seamlessly and quickly. With the ONDC Protocol providing a standardised framework, both lenders and buyer applications can achieve greater efficiency and broader reach.
Lenders simply need to adopt the ONDC Protocol to gain access to multiple distribution points. Similarly, buyer applications with the ONDC Protocol will have access to multiple lenders with a single integration.
ONDC shared that there is a strong pipeline of buyer applications with interest in expanding this digital credit model, such as Mobikwik, Rupeeboss and Samridh.ai, and lenders such as HDFC Bank, IDFC First Bank, Faircent, Pahal Finance, Fibe, Tata Capital, Kotak Mahindra Bank, Axis Finance, FTCash, and Central Bank of India.
Following the launch of unsecured loans, the ONDC Network plans to introduce GST invoice financing loans by September end 2024.
Subsequent products will include purchase financing for individuals and sole proprietors, as well as working capital lines for partnerships and private limited companies.