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Amazon ties up with Bank of Baroda to attract more sellers

Amazon tied up with the Bank of Baroda to offer micro loans to its sellers

Abhijit Lele  |  New Delhi 

Amazon ties up with Bank of Baroda to attract more sellers

Online marketplace giant India is racing against time to bring in more so that they sell more on its platform during the festive season. On Friday, it tied up with the to offer micro to its

The firm’s arm, Seller Services Pvt Ltd (ASSPL), is bringing in more financial partners so that it can cater to its 225,000 seller base. The company had last year announced the launch of a seller lending programme in India for small and medium businesses to get fast and easy access to working capital. 
The company had partnered with Capital First Limited, an independent Mumbai-based non-banking financial company (NBFC), for the programme. Capital First provides secured and unsecured to from Rs 5 lakh to Rs 2 crore at competitive interest rates.

According to the company, would be offered on invite-only basis to sellers, based on their performance. The programme was piloted by in July this year in association with the bank. The would be extended in the range of Rs 1-25 lakh at annual interest rates between 10.45 per cent and 11.5 per cent.
In India, unsecured of Rs 1-25 lakh have very low approval rates. Small-scale businesses get at high annual interest rates of 18-30 per cent, with a processing time of up to 30 days. In addition, small businesses have to go through heavy documentation and due diligence to get loan approvals, executives from the bank said.

“Through our engagement with sellers, we realised that lack of financial resources can hinder the growth of small businesses as they scale up, which can impact expansion, especially ahead of the festive sales,” India director and general manager (seller services) Gopal Pillai said.

Online marketplace players help secure so that they can buy or produce more and in turn sell more on their platform. Bengaluru-based online player Flipkart also offers for as little as Rs 25,000 to Rs 2 crore. According to industry estimates last year, both and Flipkart disbursed around Rs 2,500 crore in to more than 350,000 in all. 

“We clearly understand the specific needs of SMEs for e-commerce business and are proud to partner with India to provide comprehensive banking solutions to their over 200,000 seller base,” the bank's managing director and CEO P S Jayakumar said. He said the bank expects to get on board 15 to 20 per cent of on this programme in the next one year.

The on will receive pre-approved indicative offers from the bank for the loan amount they are eligible. They will be able to use their sale disbursements on the marketplace to directly repay the loan.

First Published: Sat, September 16 2017. 01:18 IST