E-commerce giant Flipkart is making bold moves in India’s fintech sector, earmarking an investment of approximately $15 million to $20 million for the creation of an in-house credit marketplace. This initiative comes just two months after Flipkart entered the personal loan market through a collaboration with Axis Bank.
The credit marketplace project is under the leadership of Prakash Sikaria, Senior Vice President at Flipkart, who also heads Flipkart’s social commerce platform, Shopsy. According to reports, this marketplace will operate as a separate entity within Flipkart and is expected to be operational by the end of this year or early next year.
While Flipkart is known for its e-commerce prowess, it is expanding its financial services portfolio. The investment for the credit marketplace will be allocated over time as Flipkart works on various financial products.
One notable aspect of this venture is that both Flipkart and its parent company, Walmart, are expected to have a stake in the credit marketplace. While external funding might be considered in the future, the initial capital investment is substantial.
The credit marketplace will offer a range of credit products, including personal loans of up to INR 5 lakh, and may potentially extend its services to external platforms and customers.
This move into lending is part of Flipkart’s broader fintech strategy. The company already offers a co-branded credit card in partnership with Axis Bank. Moreover, Flipkart is reportedly developing an in-house underwriting model to enhance risk assessment processes before disbursing loans. Additionally, it plans to launch a third-party app for UPI (Unified Payments Interface) transactions.
Notably, Flipkart’s primary rival, Amazon, has also ventured into fintech through Amazon Pay, offering services like recharges, bill payments, and peer-to-peer transactions via UPI. Amazon Pay has emerged as one of the top five UPI apps in India, underscoring the potential in India’s fintech landscape.
The timing of Flipkart’s financial product expansion coincides with PhonePe’s departure from the Flipkart group. This credit marketplace will harness Flipkart’s extensive user base and leverage shopping data and behavior to compete against existing players in India’s fintech sector, such as Navi, CRED, Paytm, and more.
As Flipkart diversifies into fintech, it’s set to play a significant role in shaping India’s evolving financial services landscape, offering consumers a broader array of options and enhancing competition in the sector.