Amazon India has partnered with Bank of Baroda to offer unsecured micro loans to its sellers ranging from Rs 1 lakh to Rs 25 lakh. The company claims that the seller will get the credit line in a short span of three-five days with an annual interest rate of 10.45% – 11.5% with lighter documentation.

Apparently getting loans traditionally in this range takes some 30 days and charges annual interest rates between 18% – 30% currently. The alliance is part of Amazon’s Micro-Lending Facilitation Program, which was started two years ago for its sellers.

Amazon said in a statement that the programme is open to all sellers on Amazon’s platform, including those who are present on other e-commerce platforms as well, and 100 sellers have have already onboarded the programme.

Competition: Amazon India’s rivals or e-commerce players like Flipkart, Craftsvilla, ShopClues, and Snapdeal too have similar programmes in place to help sellers in getting easy loans.

Bank of Baroda 

Bank of Baroda expects the programme to achieve a 20% penetration rate amongst sellers on the platform over the next 1 year, said the statement. PS Jayakumar, MD & CEO, Bank of Baroda said in a statement that this tie is part of bank’s ecommerce dedicated offering- Baroda ECOM loan product (BEL), which aims to ease lending process in this sector.

It looks like that the bank is bullish on small sellers, as its said in its financial results for Q1FY18, that 20% of its overall loans portfolio accounts for Micro, Small & Medium Enterprises (MSMEs).

How it works

Note this, the programme is as now available on invite-only basis,  as sellers on Amazon.in will receive pre-approved indicative offers from Bank of Baroda on their dashboard on with the credit amount they are eligible for and the associated interest rate and service fee. Amazon said that to avail the offer, seller will be filling a 10-minute long application form, and they will receive the final loan approval decision within 2-3 working days of submitting relevant documents online. The approval will be given on the basis of seller’s selling history (which takes into account a minimum tenure, and minimum sales volume), customer feedback and compliance with Amazon and Bank of Baroda’s policies and guidelines. BEL will also examine the eligibility of the seller for loan based on alternative profiling based on data points such as ID, contact-ability, intent, ability, stability using alternative social media data, and also digital analysis of bank statements.

Moreover, sellers will be able to use their sales disbursements on the Amazon marketplace to directly repay the loan.