By Elton Gomes
Amazon India unveiled its ‘Seller Lending Network’ on Wednesday, which is an initiative that would offer loan options to sellers on Amazon Indias website. The network aims to scale up Amazon’s ‘Seller Lending Program’, which was introduced in 2016.
The e-commerce giant stated the network will not only provide sellers with a wider options of loans but also offer tailor-made loans as per their specific needs. To combat competitive rates offered by other lenders, Amazon India said sellers can save up to 150 to 200 basis points on interest rates by opting for . a loan through their network.
Sellers will be able to avail loans through an online application process that requires minimal documentation. The online process also leads to quicker approval process new loans could take two to three days to get approved while existing loan renewals can be possible within one day, the company added.
The company already has six lenders on board – Aditya Birla Finance, Bank of Baroda, Capital First, Capital Float, Flexiloans, and YES Bank.
Gopal Pillai, general manager and director of Seller Services, Amazon India, told the Business Standard, Our sellers come from different parts of the country with different needs. Lack of working capital is one of the main reasons that stops sellers from selling online, and we wanted to remove that obstacle.
To avail a loan, the seller would need to have at least four to six months of business history on the Amazon platform. Pillai said, We have a proven algorithm which predicts the sellers capability to repay based on their historical performance. Amazon further claimed that sellers who take loans on their network avail an equal amount of incremental business on the e-commerce platform.
A separate portal for lenders called ‘Lenders Central’ has also been designed by Amazon. Through this portal, lenders can manage their business, including tracking repayment schedule, application status, and amount to be paid.
Despite the introduction of the GST, which was a significant concern for sellers, Amazon India was able to add 3.4 lakh sellers to its seller base. As Amazons competition with Flipkart in the Indian market heats up, a new initiative will certainly favour Amazon. In April, the Times of India reported that Amazon was the fastest growing marketplace in India, and its India website was the most visited e-commerce site. A new initiative for lenders and sellers might help Amazon proliferate its presence in the Indian market.
Elton Gomes is a staff writer at Qrius