Amazon and Flipkart are expanding beyond e-commerce: they are preparing to offer loans to small businesses and merchants in India
- Amazon has acquired a non-bank lender, Axio, earlier in 2025 — via this NBFC, Amazon plans to restart credit services tailored for small businesses, including cash-flow solutions.
- Flipkart, for its part, set up its own lending unit Flipkart Finance (registered in March 2025) and is awaiting regulatory clearance — once approved, it aims to offer SME/merchant loans and “buy-now, pay-later” (BNPL) options.
📈 What the Plans Look Like
- For small businesses/merchants: Amazon plans to design “tailored lending propositions” — helping merchants manage cash flow, unlock working capital, and support expansion, especially for digitally active sellers in tier-2 and tier-3 cities. The Economic Times
- For consumers and shoppers (via Flipkart): Once its NBFC is approved, Flipkart Finance will offer purchase financing — including no-cost monthly installment loans (3–24 months) and loans for consumer durables at interest rates of ~18–26% p.a.
- Financial-service expansion: Alongside loans, the move also opens up cash-management tools, flexible credit, and working-capital solutions — marking a shift from being marketplaces to full-stack enablers for merchants and users.
🌍 Why This Matters — For Businesses, Banks & The Indian Credit Market
- For small businesses & sellers: This could ease access to capital — often a big challenge — helping them manage inventory, expand operations, or smooth cash flow, especially for sellers outside major metros.
- For e-commerce ecosystem: By offering credit and financing, Amazon and Flipkart strengthen their grip on the supply-chain — from sellers to consumers — enabling more integrated commerce and finance services on their platforms.
- For traditional banks and NBFCs: This encroachment into lending by big digital platforms could increase competition and pressure incumbents, especially in the SME and retail-loan segments.
- For the broader market: India’s digital-credit market is already growing rapidly. The entry of Amazon and Flipkart could accelerate adoption of digital lending, bringing financing access to more underserved or remote businesses.
🔭 What to Watch Next
- Official rollout: When exactly Amazon (via Axio) and Flipkart Finance will start disbursing small-business loans.
- Terms & interest rates: What kinds of interest rates, eligibility criteria, and repayment options are offered to merchants — affordability will matter.
- Impact on small merchants: Whether this actually improves access to working capital and supports growth — or leads to increased credit risk / over-leveraging.
- Response from banks & regulators: How traditional lenders and financial-regulators react to big e-commerce platforms entering lending space.
