Snapdeal to attract sellers: Plans to disburse Rs 1k crore in six months

One of India's online retail marketplaces Snapdeal is aiming to expend loans worth Rs 1,000 crore over the next six months to its sellers to attract them to sell on its platform,
Snapdeal plans ahead

One of India’s online retail marketplaces Snapdeal is aiming to expend loans worth Rs 1,000 crore over the next six months to its sellers to attract them to sell on its platform,

In order to make the process quick and efficient, Snapdeal has done away with bulk paperwork such as financial statements and collaterals. Instead, the Softbank-backed e-commerce company has developed an industry-first credit rating engine on the lines of CIBIL. It uses big data algorithms to detect risk behaviour and payback capability of borrowers by tracking their transaction history and customer feedback.

Snapdeal claims there has been no default by its sellers yet. Vijay Ajmera, senior VP, Capital Assist programme, Snapdeal said that there are similar credit rating engines used in Europe and the US such as Kreditech and Kabbage. This is the first time that such a pioneering credit rating engine has been developed in India to provide cash to merchants. The company is in conversation with several banks wishing to lend to online sellers for the adoption of the rating engine.

Interestingly, loans through Snapdeal's Capital Assist programme have rate of interest that is at least 2-3% lower than what online sellers would otherwise get from banks. According to Ajmera, the brand has disbursed more than Rs 300 crore worth of loans already. Around 70% of these loans are less than Rs 10 lakh, reveals data provided by the Jasper Infotech-run e-commerce marketplace. Around 1,200 out of a total of 2.5 lakh sellers on Snapdeal have signed up for loans.

Ajmera added that loans as small as Rs 30,000 have been sanctioned to help small businesses scale up from scratch. They aid the smaller sellers to grow and expand their businesses and even help them stay loyal.

Sellers that partner with various e-commerce players such as Amazon, Flipkart and Snapdeal are important in the online supply-chain machinery. Companies lure them with goodies such as loans and technical know-how, because a higher number of sellers on the platform mean a wider collection of products and categories for the end customer.

In December, Jack Ma-led Chinese e-commerce company Alibaba announced plans to double the number of small and medium enterprises from India on its platform. The company, which has stake in Snapdeal, promised to provide a 360-degree support system, including finance and training to small businesses from India that are looking to scale up.

Publish Date
Not Sponsored
Live: People Reading Now
RECOMMENDED FOR YOU
TRENDING ARTICLE