Snapdeal collaborates with SBI to offer loans to ecommerce sellers

SBI has taken a positive step by collaborating with e-commerce major Snapdeal to offer instant loans to its sellers
Snapdeal collaborates with SBI

A joyous moment for online e-commerce players as State Bank of India, country's largest lender today launched SBI e-Smart SME to offer easy working capital.
The bank has taken a positive step by collaborating with e-commerce major Snapdeal to offer instant loans to its sellers.
SBI chairman, Arundhati Bhattacharya told reporters,” The e-commerce expansion has created a new ecosystem, allowing more than 5 lakh sellers to sell their product on digital platform. It has also unlocked opportunities for the banking industry."
“In place of traditional lending based on financial statements like balance sheet and income tax returns, SBI E-Smart SME will assess seller’s credit eligibility by using data analytics gathered by Snapdeal. The bank is also planning a similar tie-up with Flipkart, Paytm and Amazon going forward”, she said.
She also added, "The biggest challenge for SMEs is to raise financing through formal banking, as often they don't have collateral or a long history of financial statements to give confidence to lender”.
Snapdeal co-founder and CEO Kunal Bahl said, "Through this real time analytics tool we have created with SBI, we can assign a credit score to all sellers on our platforms.”
He added, “Within a span of one year, through its Capital Assist Program, Snapdeal granted over Rs 250 crore to 1,000 sellers. This year, it is targeting Rs 1,000 crore loans to SMEs”.
In May last year, SBI had collaborated with Snapdeal to grant seller loans through the latter's Capital Assist platform. This initiative to fund instant loans will take it further ahead.
Initially, sellers will be able to take loans up to Rs 25 lakh. Loans up to Rs 10 lakh will be collateral free with a competitive interest rate. Interestingly, women entrepreneurs will have a special concession of 25 basis points. Loans below Rs 10 lakh will be covered under the Pradhan Mantri Mudra Yojana Scheme.
Management consulting firm BCG was hired to facilitate the development of this credit model. Yesterday, SBI had launched InCube in Bengaluru to specially cater to the needs of startups. The bank has nearly one million MSME customers with a loan book of around Rs 1,80,000 crore as on December end.
SBI and Snapdeal are also considering collaboration opportunities on various other areas in the digital banking space.

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