Introduction
Walmart's Flipkart has received a lending license from the Reserve Bank of India, allowing it to offer loans directly to customers and sellers on its platform. This marks a significant development in the Indian e-commerce sector.Context
This is the first instance of the Reserve Bank of India granting a non-bank finance company (NBFC) license to a major e-commerce player, enabling Flipkart to lend directly, albeit without accepting deposits. Currently, most e-commerce platforms rely on partnerships with banks and NBFCs to provide loans. The new license presents a more profitable model for Flipkart, the largest e-commerce firm in India.Developments
The central bank issued the certificate of registration to Flipkart Finance Private Limited on March 13, affirming its recognition as an NBFC. The approval letter associated with this registration has been confirmed by Reuters but has not been publicly reported until now. Flipkart applied for this license in 2022, according to the central bank's documentation.The company, in which Walmart holds over an 80% stake, is anticipated to begin lending operations "in a few months," contingent upon completing internal processes such as appointing management personnel and finalizing business plans.
Flipkart intends to provide loans directly to customers through its e-commerce platform and its fintech app, super.money. Additionally, it plans to offer financing solutions to sellers. Currently, Flipkart partners with lenders like Axis Bank, IDFC Bank, and Credit Saison to facilitate personal loans for its customers.
As of 2024, Flipkart was valued at $37 billion during a funding round led by Walmart, which acquired a controlling stake in the company in 2018. This acquisition also included ownership of PhonePe, a fintech firm poised for an initial public offering (IPO).
Notably, earlier this year, Flipkart’s competitor Amazon entered into discussions to acquire Bengaluru-based non-bank lender Axio, although the deal has yet to receive approval from the central bank.