Amazon and Flipkart push deeper into Indian consumer lending

MUMBAI — Two of the world’s biggest e-commerce players are stepping further banking territory in India, targeting shoppers and small businesses with new loan products. their latest moves raise fresh questions for traditional banks already under pressure from digital payment apps and fintech lenders.

Amazon is preparing new lending offers for small and medium-sized sellers on its marketplace, aiming to help merchants stock inventory and manage cash flow ahead of key sales periods. Walmart-owned Flipkart, meanwhile, is exploring buy-now-pay-later options and other consumer credit tools to encourage larger baskets and more frequent purchases on its platform.

Together, these initiatives are part of a broader shift where tech and retail firms look beyond transaction fees and advertising into higher-margin financial products. India’s consumer loan market has exploded from nearly $80 billion in March 2020 to around $212 billion as of March 2025, creating opportunities for platforms that already hold massive amounts of shopper data.

Why banks and regulators care

For banks, the expansion of platform-based lending means more competition in segments that used to be their turf, especially unsecured consumer credit and working capital for small traders. Some lenders may choose to partner with e-commerce companies as white-label providers, but others risk losing direct customer relationships and valuable data if they stay on the sidelines.

Regulators are watching closely because rapid growth in digital credit can create pockets of risk if underwriting standards weaken or if borrowers don’t fully understand the terms. “The challenge is to harness innovation without allowing hidden risks or predatory practices to build up in the system,” said Ananya Rao, a former central bank supervisor.

What it means for Indian consumers

For shoppers, the attraction is simple: more flexible payment options, instant approvals, and fewer trips to a bank branch. Affordable installment plans and pay-later offers can help smooth big-ticket purchases like smartphones or appliances, as long as customers keep track of fees and due dates to avoid mounting interest.

For small sellers, access to fast working-capital loans tied to marketplace sales can be a lifeline during festival seasons or supply chain disruptions. The real question is whether borrowers will shop around on price or accept whatever rate is embedded in the checkout flow.

Bottom line? As Amazon and Flipkart expand in lending, the line between retailer, tech platform, and financial institution keeps getting blurrier in India. Banks that lean into data partnerships and digital onboarding stand to stay relevant, while those that move slowly could see profitable niches chipped away by nimble, app-first rivals.