In a bid to expand its operations beyond cab hailing and food delivery, Ola is reportedly betting on FinTech and has applied for a permit to launch a non-banking finance company (NBFC). Olaâ€™s efforts to expand its financial services business has been on-going for some time now. Back in December 2017, it made its first major move in this direction with the appointment of Nitin Gupta, co-founder of PayU India, as the CEO of Ola Money.
According to an Economic Times report, Ola is looking to partner with a bank to launch a credit card and also sell insurance to drivers and customers. It is to be noted that Ola currently offers trip insurance to its riders for an additional cost of one rupee. An extension of its insurance program â€˜Chalo Befikarâ€™ for its drivers, it partnered with Acko General Insurance to launch this program, which gives riders an insurance policy of Rs 5 lakh covering missed flights, loss of baggage, loss of laptop, emergency hotel requirements, and many more.
Interestingly, this news comes days after Ola announced that it will be expanding its 15-day credit service â€˜Ola Money Postpaidâ€™ to all of its users across India. Ola Money Postpaid, launched in 2019, has been so far available only to select users as a pilot. ET reports that depending on the repayment behaviour, Ola may extend the 15-day repayment cycle to 30 days.
While announcing its plan to extend the offering, Ola said that Ola Credit was witnessing a 30% growth month-on-month with 90% of its early users, using the offering more than once. It had also said in a statement at the time that it is looking to make this service available in other segments as well including food, entertainment and utilities.
As growth in the cab hailing business begins to slow down, this is part of Olaâ€™s diversification plan of expanding into adjacent categories where it can leverage its distribution network to offer valuable services. It has already expanded into food-tech with the acquisition of Foodpanda. There have also been reports that Ola is looking to enter pharma delivery. In the case of its new plans, Ola now wants to use its NBFC arm to expand its lending offerings to customers beyond just Ola Postpaid.
The credit market too, has seen several startups looking to enter the buy-now-pay-later space. There have been startups such as Simpl, LazyPay, etc, which have launched these services.