Amazon and Flipkart Aims to Enter India's Lending Market with New Loan Products

Amazon and Flipkart are preparing new lending products for shoppers and small businesses in India, as per The Economic Times reports.  

Their plans follow recent Reserve Bank of India (RBI) rules that allow companies to lend directly through fully owned finance units. This gives large digital platforms room to offer credit in segments usually led by banks. 

Amazon’s Next Phase Through Axio 

Amazon’s expansion is tied to Axio, the Bengaluru-based non-bank lender it acquired earlier this year. Axio, which already runs buy-now, pay-later (BNPL) and personal loan products, will restart lending to small businesses. It will also introduce simple cash flow tools to help merchants manage daily payments and working capital. 

As per Reuters, Mahendra Nerurkar, who oversees payments for Amazon in emerging markets, said the company sees demand for credit among smaller firms and customers in non-metro regions. He said Amazon is working on loan formats that fit the cash cycles of small sellers. 

Flipkart Prepares Pay-Later Products 

Flipkart registered its lending arm, Flipkart Finance, in March and is waiting for the RBI’s final approval. Company filings list 2 types of pay-later products: no-cost instalments for online purchases with repayment windows of 3 to 24 months, and loans for consumer durables priced between 18% and 26% a year. 

Comparable durable loans from banks and traditional lenders usually fall between 12% and 22%. A person with knowledge of the plans said Flipkart expects to launch its products next year, adding to categories such as personal loans and appliance financing. 

UPI Platforms Build Distribution 

Both Amazon and Flipkart run UPI payment apps that regularly appear among the top 10 most-used platforms in the country. This gives them a steady pool of active customers for future financial offerings.  

Amazon has also partnered with 6 domestic lenders to offer fixed deposits through Amazon Pay, with minimum deposits starting at ₹1,000. 

Read More: End of a 6-Decade Monopoly: Govt Opens Private Companies to Make Nuclear Reactors!  

Conclusion 

Amazon and Flipkart are preparing to expand their presence in India’s credit market through business loans, pay-later products and deposits. Their entry adds more competition for banks, especially in small-ticket and merchant-focused lending. 

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