Zomato news update
Aaccoding to Moneycontrol news portal after pausing its lending ambitions for a few years, food delivery giant Zomato is looking to revive the service and is engaging with multiple non-banking financial companies (NBFCs) to provide working capital loans to its partner restaurants, according to three people familiar with the developments who spoke to Moneycontrol.
As part of the deal, Zomato will also function as a Loan Service Provider (LSP). In this role, the company will source loans from its partners and disburse them to potential borrowers, earning a fee based on its arrangement with the lender. This arrangement may also make Zomato responsible for collections from the end-users.
The team has been brainstorming and working behind the scenes for some time and may announce something next quarter, sources said.
In February, Zomato hired Akshay Gautam from Indifi Technologies, its previous lending partner, as Assistant Vice President (AVP) to lead the initiative. “Zomato started lending with partners back in 2021 during the pandemic but paused because they wanted to issue loans through their own NBFC license, which is still pending approval. The company has now decided to restart lending under a partnership model,” added one source.
Zomato declined to comment on these developments.
The concept of lending is not new to Zomato or its archrival Swiggy. Swiggy entered the lending space in 2017 with its “Capital Assist” program, partnering with NBFCs like Indifi, Incred, FT Cash, PayU, and IIFL, allowing restaurant owners to apply for term loans for expansion, renovation, or equipment purchases via the Swiggy Owner app.
As of October last year, this arrangement continues. Moneycontrol could not verify updates on existing or new partnerships.
As of October 2023, Swiggy claims that over 8,000 restaurants have taken out loans through the program, with more than Rs 450 crore disbursed since its inception in 2017. Swiggy has also extended the service to its delivery partners, offering short-term unsecured personal loans for medical emergencies, vehicle breakdowns, and unforeseen expenses in partnership with Betterplace and Refyne.
Swiggy claims to have disbursed loans worth Rs 102 crore in this category over the past 12 months.
