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Amazon expands its seller lending program, ends invite-only basis criteria

Amazon India has expanded its Seller Lending program, with the launch of Seller Lending Network to enable loans to sellers from third-party lenders such as Aditya Birla Finance, Bank of Baroda, Capital First, Capital Float, Flexiloans, and Yes Bank.

No more invite-only basis: Amazon India had launched its seller lending programme in February 2016. The company had partnered with Capital First Limited, a Mumbai-based NBFC) to provide secured and unsecured loans to sellers from Rs 5 lakh to Rs 2 crore. However, these loans were available on the invite-only basis. In September 2017, Amazon India partnered with Bank of Baroda to offer unsecured microloans to its sellers ranging from Rs 1 lakh to Rs 25 lakh. This programmer too was available on the invite-only basis.

With this launch, Amazon has opened up a separate Seller Central portal, where sellers can perform all loan-related activities including viewing multiple loan offers, applying for loans and easy/automatic loan repayments by linking their Amazon sale proceeds to their loan account.

Besides this Amazon has also created Lender Central, a portal for Lenders (similar to Seller Central for sellers), to facilitate the exchange of information between lenders and Amazon. Lender Central facilitates information about seller performance data, loan application status and loan portfolio details. In addition, by using Lender Central, lenders can track the performance of a seller on Amazon.in real-time.

How does it work? The sellers will be able to choose loan offers suitable for their business needs from multiple lenders and loan types (term loans or overdraft loans). Sellers can avail loans via an online application process with minimal documentation and a loan approval process of 2-3 days for new loans, and intraday approval for existing loan renewals. The company claims in a statement that it will provide loans on competitive interest rates and sellers will be able to save somewhere between 150 – 250 bps on the same.

Gopal Pillai, GM & Director Seller Services, Amazon India told in a statement that loan disbursements under its Lending Program have grown 4.5X since 2016. Amazon India has about 3.4 lakh sellers selling on its marketplace.

Other lending programmes

— Online food ordering and delivery platform Swiggy has tied-up with Indifi Technologies to launch what it calls the ‘Swiggy Capital Assist’ programme, through which it will provide easy access to working capital loans for its restaurant partners.

— Flipkart Marketplace, also offers sellers on its platform access to easy loans through lending partners such as Capital Float and Lendingkart.

— Snapdeal had has a tie-up with like of Capital Float to serve the same purpose of providing sellers with easy access to working capital loans.

— Ola had tied up with FlexiLoans to offer Ola’s drivers to offer ‘business and need based’ loans of up to Rs 100,000, only for its ‘Ola Star’ or top rated drivers in Mumbai and Bangalore.

— MakeMyTrip, GoIbibo, ShopClues, Foodpanda, Yatra, and Pine Labs etc also has similar offerings for the merchants on their platform

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