WhatsApp might soon start offering loans in India: Details here
What's the story
Since 2018, WhatsApp has been working on a peer-to-peer transfer facility for India - its biggest market. The service still remains in phased testing with select users, but a new report from TechCrunch suggests that the company's ambitions go way beyond messaging and payments and it has much more up its sleeve. Here's all you need to know about it.
Details
'Credit' listed as business goals in regulatory filing
In a recent filing with the Ministry of Corporate Affairs in India, WhatsApp listed 'credit' as one of the main objects it plans to pursue in the country. It added that the goal would be to "advance money or give credit on such terms as may seem expedient, and with or without security, to customers and others."
Partnership
Banks likely to be involved
While the filing, sourced by business intelligence platform Tofler, did not detail the technicalities of the plan to offer credit in India, it noted that the service might be delivered through partnerships with banks and financial institutions. This is mainly because WhatsApp is not a banking business and is legally not authorized to lend from its side.
Wait
Awaiting approval for WhatsApp Pay
According to sources cited by The Times of India, WhatsApp has given serious thought to the lending business but is waiting to get approval of National Payments Corporation of India (NPCI) for its UPI-based payments service, dubbed WhatsApp Pay, first. Although WhatsApp Pay went into testing in 2018, the company has not been able to roll it out widely due to regulatory issues.
Information
Only 1 million have access to WhatsApp Pay
As of now, only 1 million WhatsApp users in India have access to the company's payment service. There were some reports of its expansion to 10 million but unless that changes to full roll-out, the availability of lending services seems unlikely.
Lending plan
Many questions remain over the lending model
That said, it still remains unclear what kind of loans WhatsApp might provide - direct loans like ZestMoney, loans for purchases via WhatsApp Pay, or something specific like loans for merchants using WhatsApp for their business. The latter makes sense given that Facebook, WhatsApp's parent company, has already invested $5.7 billion in Jio, which also plans to foray into lending, to empower small businesses.