FILE PHOTO: Smartphone with Amazon logo is seen in front of displayed Flipkart logo and Indian flag in this illustration taken, July 30, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

By Ashwin Manikandan and Jaspreet Kalra

MUMBAI (Reuters) -Amazon is preparing to offer loans to small businesses in India, while Walmart-owned Flipkart is looking at buy-now, pay-later (BNPL) products as the e-commerce giants take on the country's banks with a push into financial products.

Amazon acquired Bengaluru-based non-bank lender Axio earlier this year. Currently focused on BNPL and personal loans, Axio will re-embark on offering credit for small businesses and start offering 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.

He added the company would be "designing tailored lending propositions" for merchants and small businesses to improve cash flow management efficiency and unlock capital.

The details of Amazon's plans have not been previously reported.

Flipkart, in which Walmart has a stake of about 80%, registered its non-bank lending arm, Flipkart Finance, in March and is awaiting the Reserve Bank of India's final approval for its business plans.

Company filings show two types of planned pay-later offerings: no-cost monthly installment loans for online shoppers over 3 to 24 months, and loans for consumer durables at 18%–26% interest rate per annum.

Interest rates on loans for consumer durables from traditional lenders typically range between 12% and 22%.

Flipkart expects to start offering these financial products next year, according to a source with direct knowledge of its plans.

The source was not authorised to speak to media and declined to be identified. Flipkart and the RBI did not respond to requests for comment.

India's consumer loan market has grown from nearly $80 billion in March 2020 to around $212 billion as of March 2025, according to data from credit bureau CRIF High Mark, although there have been signs of a slowdown in recent quarters.

Consumer loans include unsecured personal loans, credit cards and loans for consumer durables.

Both Amazon and Flipkart operate apps that rank among the top 10 platforms used to make payments via India's Unified Payments Interface.

Their financial ambitions gained a major boost earlier this year, when the RBI allowed them to lend directly to customers through wholly owned units. That also marked a significant opening of India's financial services market 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 consultancy Grant Thornton Bharat's financial services risk division.

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

Amazon has also tied up with half a dozen local lenders to offer fixed deposit savings products with minimum amounts of 1,000 rupees ($11) to customers on its Amazon Pay platform, Nerurkar said.

(Reporting by Jaspreet Kalra and Ashwin Manikandan in Mumbai; Editing by Edwina Gibbs)