Small merchants find bankers in e-tailers

NEW DELHI: If you are a seller with one of the prominent e- commerce platfor ms, 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 finan- cial 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 ` 300 crore of working capital till date. Some merchants have raised up to ` 5 crore, while the average loan value is ` 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 ` 55 crore worth of loans.

Even Flipkart and Amazon have entered the race. In December, Flipkart said it helped more than 250 sellers get ` 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 ` 10 lakh, and takes commission on every disbursement.