Flipkartās 100 million customers and around 100,000 sellers could be in for some better times, at least with regard to their needs for finance for making purchases is concerned. The Indian ecommerce giant has announced that it is entering the fintech sector in a serious manner having applied for an NBFC licence.
Flipkart will then come to the rescue of customers on its platform who would want to make substantial purchases but are unable to do so for want of funds. According to the company, the segment of its customers without access to funding due to various reasons could be as high as 60%. They either donāt have credit cards or cannot obtain loans from banks or other funding sources. Flipkart will aim to fill this gap and lend the amounts to facilitate the purchases and have a system to collect the repayments.
In the case of the sellers on the site, though there is a mechanism to extend financial help to them within Flipkartās existing terms of engagement itself, it is not being adequately serviced, particularly where swift approvals for lending are concerned. This will be rectified and a smoother lending platform that can make the loans available within minutes of the requests being received will be put in place.
Apart from the lending vertical, there have been talks of Flipkart wanting to foray into the insurance sector as well. Though in the long term the plan is to include all insurance products, like life and general insurance.
Interestingly, Flipkart has plans to follow a different path from the ones adopted by some of the existing players like CoverFox or BankBazaar; the ecommerce company would not act as the aggregator but would directly offer the loan products from its own balance sheet. Similarly, for insurance policies as well, the company would take it upon itself to be the policy issuing authority. It is learnt that Flipkart has already entered into arrangements with partnering firms for the lending business, though their identities have not been disclosed.
If Flipkart is doing all this, can Amazon be found wanting? Amazon is also reported to have reached quite advanced stages in launching its own financial services aimed at funding customers on its site and to help vendors registered on its platform access funds easily.