Walmart’s Flipkart secures approval for direct lending in India

Walmart purchased a controlling stake in Flipkart in 2018, which additionally gave it possession of PhonePe, a fintech agency additionally making ready for an IPO [File]
| Picture Credit score: REUTERS

Walmart’s Flipkart has secured a lending licence from the Indian central financial institution and banking regulator, enabling it to supply loans on to clients and sellers on its platform, a spokesperson for the corporate confirmed after Reuters reported the event citing paperwork and a supply.

That is the primary time the Reserve Financial institution of India has granted a big e-commerce participant in India a non-bank finance firm (NBFC) licence, permitting it to lend however not take deposits.

Most e-commerce platforms at present supply loans in tie-ups with banks and NBFCs, however a lending licence will allow Flipkart, India’s largest e-commerce agency, to lend straight, a extra profitable mannequin for the group.

The central financial institution issued its certificates of registration, a doc that formally recognises an organization as an NBFC, to Flipkart Finance Non-public Restricted on March 13.

Reuters has reviewed a replica of each the certificates of registration and the approval letter additionally dated March 13. The approval has not been beforehand reported.

Flipkart, through which U.S. retail behemoth Walmart holds a greater than 80% stake, utilized for the licence in 2022, in line with the central financial institution’s approval letter.

The Reserve Financial institution of India didn’t instantly reply to Reuters’ request for feedback.

The e-commerce big could begin its lending operation “in a number of months”, in line with a supply conscious of the matter who declined to be recognized because the talks are non-public.

A last resolution on the launch will likely be topic to the completion of assorted inside processes such because the appointment of key administration personnel and board members and the finalisation of enterprise plans, the supply stated.

Flipkart plans to lend on to its clients on its in style e-commerce platform and thru its fintech app tremendous.cash, the supply stated. It might additionally supply financing to sellers on the platform, they added.

At current, the e-commerce big gives private loans to clients by tie-ups with lenders similar to Axis Financial institution , IDFC Financial institution and Credit score Saison.

Flipkart, final valued at $37 billion in 2024 when it raised $1 billion in a funding spherical led by Walmart, is shifting its holding firm from Singapore to India. Walmart additionally goals to take the 17-year-old firm public.

Walmart purchased a controlling stake in Flipkart in 2018, which additionally gave it possession of PhonePe, a fintech agency additionally making ready for an IPO.

Earlier this yr Flipkart’s rival Amazon acquired a Bengaluru-based non-bank lender Axio, however the deal is but to be cleared by the central financial institution.