Citing people close to the matter, Moneycontrol reported that Zomato will operate as a loan service provider as part of the deal.
As an LSP, the company will take loans from its partners and provide the amount to potential borrowers by charging a fee in exchange
This comes a few days after Zomato voluntarily surrendered its payment aggregator license after RBI's nod earlier this year in January
Foodtech major Zomato has reportedly kicked off discussions with several non-banking financial companies to offer working capital loans to its partner restaurants, years after hitting a pause button on its lending service.
Citing people close to the matter, Moneycontrol reported that Zomato will operate as a loan service provider as part of the deal.
As an LSP, the company will take loans from its partners and provide the amount to potential borrowers by charging a fee in exchange. This could mean Zomato will be responsible for collection from end users, the report added.
Inc42 has reached out to Zomato for a comment on the development. The story will be updated based on the response.
RBI defines an LSP as an agent of a regulated entity (RE) that carries out one or more functions on behalf of the lender. This includes customer acquisition, underwriting support, pricing support, disbursement, servicing, monitoring, collection and loan recovery on behalf of the RE.
RE refers to financial institutions like banks and NBFCs under the supervision and regulation of RBI.
This comes a few days after Zomato voluntarily surrendered its payment aggregator license after RBI’s nod earlier this year in January.
In 2022, Zomato registered its wholly-owned NBFC, Zomato Financial Services. However, it has yet to receive its NBFC license for the same.
Notably, in 2021, the food major incorporated Zomato’s subsidiary Zomato Payments Private Limited (ZZPL) to carry out the business as a payment aggregator. It tied up with NBFCs like Neogrowth, InCred and Indifi for this.
With PA and NBFC authorisation, the company intended to control the entire financial chain, including lending and payments, as per the report mentioned above.
Along similar lines, Zomato appointed Akshay Gautam from Zomato’s erstwhile lending partner Indifi Technologies as Assistant Vice President (AVP) to lead the initiative for Zomato.
Last year, Zomato launched its in-house UPI service for peer-to-peer and merchant transactions. But the same year it was also reported that the company had stopped onboarding new customers on Zomato UPI.
Zomato’s counterpart Swiggy
also shares the background of lending efforts with its inception into lending in 2017 with the “Capital Assist” programme in partnership with NBFCs like Indifi, Incred, FT Cash, PayU and IIFL.
