To diversify beyond its core-ride-hailing business to support growth, home-grown cab hailing major Ola has now applied to the RBI for a non-banking finance company (NBFC) licence.
The company plans to deepen its already operational short term credit service or pay-later product, Ola Credit, by launching a credit card in partnership with a bank and sell insurance.
Currently, it offers a trip-insurance service to riders.
In July, Entrackr had first reported that Ola is working on launching co-branded credit cards for its premium riders. The SoftBank-backed company had re-branded its initial offering Ola Credit. It has been offering a postpaid service where consumers can pay later for the rides.
It allows consumers to repay Ola Credit via net banking, debit or credit cards through the integrated Ola Money e-wallet.
In the last two years, the company claims to have seen 30 percent month-on-month growth on the adoption of the feature and was all set to take it live across the company’s 150 million user base.
Last week, Ola said that it plans to extend credit cycle to a month, majorly depending on the repayment behaviour of riders.
Of late Ola has been aggressive on diversification front. After foodpanda bet, it is planning to foray in medicine delivery to make up for slow growth in ride-hailing business.
The cab-hailing firm in last year saw 20 percent down in growth to 3.5 million rides. In the last two years, it has hit lowest in terms of growth figure.
Meanwhile, Ola also aims to raise separate capital for its digital wallet Ola Money. It looks to tap in a new investor. The taxi-hailing app already got a $1 billion financing offer from its largest investor, SoftBank. But co-founder Bhavish Aggarwal does not want Softbank to have more stake in the firm.
At present, Japanese behemoth has about 26 per cent stake in Ola.
According to industry experts, financial service is a difficult segment to crack.
And Ola has a challenge up here, in order to bring in investors it has no other way but to show growth in businesses it has been diversifying into.
The report first appeared on ET.