ONDC Bolsters Fintech Play, Sees First Mutual Fund Transaction On The Network

As part of its fintech foray, state-backed Open Network For Digital Commerce (ONDC) facilitated the first mutual fund transaction on the network on Tuesday (October 1).

In a LinkedIn post, ONDC’s senior VP-Financial Services Hrushikesh Mehta said that the first transaction was of INR 100 and took place in partnership with asset management company (AMC) Nippon India Mutual Fund and online trading and investment platform Appreciate. 

Highlighting that ONDC plans to take the mutual fund offering across India, Mehta said investment platforms ATX Labs and AssetPlus will be joining the network as buyer apps soon. More AMCs are in the pipeline to offer mutual funds on the network, he added.

“75% of mutual fund AUM sits in the top 30 cities in India. Our goal is to shift this balance as we drive mutual fund product adoption outside of these cities. It has taken us 18 months but we have taken the first step to doing our part in changing our nation from savers to investors,” the post read. 

With this, ONDC is looking to make mutual fund investments accessible to more people via its network. Mehta said that the network’s financial division was working on the product for the past 18 months.

ONDC’s plans to enter the mutual fund transactions market were made public by MD and CEO T Koshy in August. He then said that the network would take the offering live in September with an aim to hit 100-200 transactions.

In August this year, ONDC initiated its fintech foray with the launch of credit offerings. Under this, customers interfacing with the network via Easypay, Paisabazaar, Tata Digital, Invoicepe, Cliniq360, Zyapaar, Indipe, Tyreplex and PayNearby can get fully digital and paperless loans in just six minutes.

Launched in 2021, ONDC is an initiative by the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce & Industry. It aims to promote open networks for the exchange of goods and services over digital or electronic networks. It claims to be online in over 611 cities with 111 network participants.

Since its inception, the network has bid to democratise the ecommerce ecosystem in India. However, foraying into the uncharted fintech territory has long been on the list of the state backed network.

 In June last year, Koshy told Inc42 that the network had established a working committee consisting of fintech industry experts to define a standard/protocol for the onboarding and integration of sellers and industry players. 

As of now, the network has plans to offer unsecured GST-based invoice loans, unsecured purchase finance and unsecured working capital lines. Besides, it also plans to enter the insurance segment with offerings like health insurance, motor insurance, and life insurance.