E-commerce giants Amazon and Flipkart are preparing to enter India’s financial services sector by offering loans to consumers and small businesses. According to a Times of India report, both platforms are gearing up to distribute loans as part of their expansion strategy.
Amazon India is focusing on providing loans to small businesses, while Flipkart is considering launching Buy Now, Pay Later (BNPL) products for its customers. Amazon had acquired Bengaluru-based non-bank lender Axio earlier this year to strengthen its financial services capabilities.
Axio, which currently focuses on BNPL and personal loans, will restart offering credit to small businesses and introduce cash management solutions. Mahendra Nerurkar, Vice President of Payments for Emerging Markets at Amazon, told Reuters that the company sees significant potential for credit growth in India, especially among digitally connected customers and small businesses outside major cities.
Flipkart’s Interest Rate Structure
Flipkart, which is approximately 80% owned by Walmart, registered its non-bank lending branch, Flipkart Finance, in March and is awaiting final approval from the Reserve Bank of India for its business plan. The company’s filings reveal two types of planned pay-later offers: monthly installment loans for online shoppers ranging from 3 to 24 months without any cost, and loans for consumer durables at 18%-26% annual interest rates.
Traditional lenders typically offer consumer durable loans at interest rates between 12% and 22%. According to a source familiar with Flipkart’s plans, the company expects to launch these financial products from next year. Both Flipkart and RBI did not respond to requests for comment.
Growing Consumer Loan Market
According to credit bureau CRIF High Mark data, India’s consumer loan market has grown from approximately $80 billion in March 2020 to nearly $212 billion by March 2025, although recent quarters have shown signs of slowdown. Consumer loans include unsecured personal loans, credit cards, and loans for consumer durables.
Both Amazon and Flipkart operate apps that are among the top 10 platforms used for payments through India’s Unified Payments Interface (UPI). Their financial ambitions received a major boost earlier this year when RBI allowed them to directly lend to customers through their own units, opening up a significant opportunity for foreign tech companies in India’s financial services market.
Rohan Lakhiyar, Partner at Grant Thornton Bharat’s Financial Services Risk Division, noted that these companies have tremendous potential to make an impact because they possess both supply-side and demand-side customer data. However, execution will be crucial as they expand beyond core retail operations.
Nerurkar mentioned that Amazon has also tied up with half a dozen local lenders to offer fixed deposit savings products to customers on its Amazon Pay platform, with a minimum amount of Rs 1,000.
Source: Daily Kiran
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