If you are a seller with one of the prominent e-commerce platforms, you are likely to find it easy to avail a loan. All you need is to have a history of selling products on e-commerce platforms. Everything else will be taken care of — connecting with the lender, negotiating interest rates, doing verification and even sending the banking correspondent to the seller’s doorstep for documentation.
A year ago Snapdeal, India’s second-largest e-commerce company acquired a majority stake in RupeePower, a digital financial distribution platform. Soon after, Snapdeal launched Capital Assist — a similar service that helps in connecting merchants with lenders. Through Capital Assist, Snapdeal has helped merchants get Rs 300 crore of working capital till date. Some merchants have raised up to Rs 5 crore, while the average loan value is Rs 20 lakh.
Snapdeal is not alone.
Flipkart, Askme, Amazon and Paytm have deployed systems to make loans available for merchants by solving four ‘pain’ areas. “To avail loans a business needs to provide three years of financial data, collateral against the loan value, visit the bank frequently, and go through a severe documentation process. We don’t need any of these to avail a loan,” said Vijay Ajmera, senior vice-president, finance at Snapdeal.
It’s not that the sellers don’t need to go through these processes, but the e-tailers provide the banks with complete data on the volume of business that a seller does, how the business has grown over the years, verifies the office address and uses analytics and information to track the business.
“We play the role of a facilitator,” said Sudhanshu Gupta, vice-president at Paytm, which enabled more than Rs 55 crore worth of loans.
Even Flipkart and Amazon have entered the race. In December, Flipkart said it helped more than 250 sellers get Rs 50 crore of loans as part of a pilot scheme. The company is now expanding the programme to all its 80,000 sellers. Arch-rival Amazon, according to recent reports, charges between 6-12% interest rate from sellers for short-term lending loans.
Another, Askme, has partnered with 70-odd financing companies. “We are also a marketplace for financers,” said Kiran Murthi, CEO of Askme. Askme Finance does an average disbursement of Rs 10 lakh, and takes commission on every disbursement.