ONDC is reportedly looking to integrate banks and fintech platforms, days after the network began early pilots for credit disbursal through its platform
The banks include HDFC Bank, IDFC First Bank and Karnataka Bank, alongside fintech firms like Fibe and others, ET reported
The move is laid out at a time when the Centre has rolled out a new initiative to facilitate onboarding of 5 Lakh micro and small businesses on the ONDC platform
Open Network for Digital Commerce (ONDC) is looking to integrate banks and fintech platforms, days after the network began early pilots for credit disbursal through its platform, by partnering with Tata Group superapp Tata Neu and Paisabazaar.
The banks include HDFC Bank, IDFC First Bank and Karnataka Bank, alongside fintech firms like Fibe and others.
ET reported the development first.
Talking to Inc42, Shireesh Joshi, chief business officer at ONDC, said, “In financial services, we first map out the sequence of steps, then we digitise those steps, then we bring in players who will perform those steps, and that is what we have completed.”
Also, talking about the regulatory challenges pertaining to these integrations, Joshi said that the network has completed the regulatory checks and have also run test transactions as well.
“Now that we have completed the test stage, we are inviting more providers of credit and providers of interest to say the network is ready, to join us and start doing business. At the moment, we have a base number that is when we will go to the public at large. That is just within a few weeks now. Because this is dependent on effort, resources that the individual banks and financial companies are providing, we do not control them, so it is dependent on when they are ready and how,” he added.
The move is laid out at a time when the Centre has rolled out a new initiative to facilitate onboarding of 5 Lakh micro and small businesses on the ONDC platform, in June.
The MSME Trade Enablement and Marketing (TEAM) scheme aimed at facilitating this, was launched by Union Minister for Micro, Small & Medium Enterprises (MSMEs) Jitan Ram Manjhi with a budget of INR 277 Cr for three years.
ONDC’s initiative to explore its hand at credit services, follows its plans to onboard news media platforms on the state-backed network, in April. As part of this move, the digital arm of Hindi media giant Dainik Jagran is in advanced stages of integration with ONDC, Moneycontrol reported.
“If you think about MSME (micro, small and medium enterprises) financing, small ticket loans for any purpose in remote villages in India haven’t been accessible from formal credit institutions. Similarly, insurance is largely limited to tier-1, tier-2 cities. For mutual funds, it’s a similar story,” said Hrushikesh Mehta, senior vice president of financial services at ONDC, to ET.
Recently, Maharashtra government said it has decided to give first class treatment to the companies’ right from MSME to large corporates at ASSOCHAM MahaMSMErashtra Empowerment Summit and Award 2024.
Encouraging MSMEs and startups has been the mission of the government for quite some time. There are almost 63 Mn MSMEs across the country contributing about 30% to the GDP, generating employment opportunities and contributing to exports, said Anurag Agrawal, co-chair, Assocham National Council on WTO, Trade and Investment Council at the event.
(The story has been updated based on the comments from ONDC’s chief business officer Shireesh Joshi.)
