Food delivery giant Zomato is planning to revive its lending business. The company is also in talks with several non-banking financial companies (NBFCs) to lend money to its partner restaurants for working capital, as per a report by Moneycontrol.
The company will also, reportedly, operate as a loan service provider. As per Investopedia, “Loan servicing refers to the administrative aspects of a loan from the time the proceeds are disbursed to the borrower until the loan is paid off.”
In simple words, Zomato will obtain loans from its partners. Further, in accordance with its agreement with the lender, the company will distribute the funds to prospective borrowers in exchange for a fee.
As per sources who spoke to Moneycontrol, Zomato has been working on it for a while now, and they might announce something in the next quarter. To lead the initiative, Akshay Gautam, who worked with Indifi Technologies (an online lending platform and a former lending partner of the company), joined the company in February, as per the report.
Read: Why Aren't Swiggy and Zepto Following Zomato's B2B Grocery Path?
Zomato joined the lending business in 2020 to enable loans for restaurants amid the COVID-19 pandemic. To help keep the businesses of the partner restaurants afloat, the company said that they would be providing working capital loans.
To apply for payment aggregator authorisation, the company even incorporated Zomato Payment Private Limited in 2021. In February 2022, Zomato Financial Services, a wholly owned NBFC, was registered. Zomato is still waiting in line for its NBFC license after two years. Highlighting the launch of Zomato Financial Services, the company informed the exchanges, “We believe we can add significant value to, and improve the experience of, our platform partners with this initiative without requiring Zomato to allocate significant capital.”
Additionally, two weeks ago, the company surrendered its payment aggregator license. While mentioning that the company does not see any cometitive cost advantage, the food delivery giant informed the exchanges, “At Zomato, we do not see ourselves having a significant competitive advantage against the incumbents in the payments space, and hence we don’t foresee a business in the payments space as commercially viable for us at this stage.”
