Amazon, Flipkart Challenge Indian Banks with New Loan Products

Key Takeaways

• Amazon and Flipkart are expanding into consumer lending, directly challenging traditional banks
• Amazon acquired Axio to offer small business loans and cash management solutions
• Flipkart registered its NBFC arm in March and plans BNPL products for 2025
• India’s consumer loan market grew from $80B to $212B between 2020-2025

E-commerce giants Amazon and Flipkart are making significant moves into India’s financial services sector, with Amazon preparing small business loans and Flipkart planning buy-now-pay-later offerings that directly compete with traditional banks.

Amazon’s Lending Expansion

Amazon acquired Bengaluru-based non-bank lender Axio earlier this year to accelerate its financial services push. While currently focused on BNPL and personal loans, Axio will expand into small business credit and cash management solutions.

“We see tremendous headroom for expanding credit growth in India, particularly among digitally engaged customers and small businesses outside of the top (cities),” Mahendra Nerurkar, vice president for payments for emerging markets at Amazon, told Reuters.

The company plans to design tailored lending propositions for merchants and small businesses to improve cash flow efficiency and unlock capital.

Flipkart’s Financial Plans

Walmart-owned Flipkart registered its non-bank lending arm, Flipkart Finance, in March and is awaiting final RBI approval. Company filings reveal two main offerings:

• No-cost monthly installment loans for online shoppers (3-24 month tenure)
• Consumer durable loans at 18%-26% annual interest rates

Traditional lenders typically charge 12%-22% for consumer durable loans. Flipkart expects to launch these products next year, according to sources familiar with the plans.

Market Context and Regulatory Shift

India’s consumer loan market has experienced explosive growth, expanding from $80 billion in March 2020 to approximately $212 billion by March 2025, according to CRIF High Mark data.

The e-commerce platforms received a major regulatory boost when the RBI allowed them to lend directly through wholly owned units, marking a significant opening of India’s financial services to foreign-backed tech firms.

“There is immense potential for them to make a dent because they own both the supply-side and demand-side customer data,” said Rohan Lakhiyar, partner at Grant Thornton Bharat.

“But execution will be key as they venture beyond core retail.”

Additional Financial Services

Beyond lending, Amazon has partnered with six local lenders to offer fixed deposit savings products through Amazon Pay, with minimum investments of just 1,000 rupees ($11), further expanding its financial footprint in the Indian market.