Reliance Group aims at eCommerce for commercial finance biz

Keeping in mind supply chain financing for e-commerce vendors, Reliance Commercial Finance has collaborated with e-retail giant Snapdeal.
Reliance targets eCommerce

Keeping in mind supply chain financing for e-commerce vendors, Reliance Commercial Finance has collaborated with e-retail giant Snapdeal. Simultaneously, it is also in communication with other leading players including Flipkart and Amazon.
Initiating the first phase, Reliance Commercial Finance (RCF), part of Anil Ambani-led Reliance Group's financial services arm Reliance Capital, will extend supply chain financing to a select set of over 80,000 Snapdeal vendors across the county.
RCF's CEO K V Srinivasan said that E-commerce is a growing opportunity that amalgamates with thousands of suppliers in servicing product request and ensure delivery. As per him, the company has launched a new e-commerce centric supply chain financing product that will assist them to offer customized options to vendors. On a large scale, the company will tie up with leading e-commerce players to offer this to their vendors.
In order to expand its e-commerce supply chain financing portfolio, RCF has begun discussions with Amazon and Flipkart as also various other e-commerce players.
Srinivasan said that eCommerce companies manage thousands of vendors across categories and around five per cent of these vendors have strong achievements and are eligible for offering financing options.
Adding further he also said that this provides a big opportunity for the lending firms. The company sees this portfolio growing. Company’s average financing has been around Rs 20 lakh and is based on a rating system developed by the platform itself. This helps the company to get the best in the lot – limiting risk and exposure.
As per industry predictions, e-commerce is a USD 38 billion opportunity and is growing at a rapid rate in India.
At present RCF has a Rs 1,000 crore book from supply chain financing and expects to grow this portfolio to Rs 1,500 crore by the end of the calendar year, marking a 50 per cent jump.
The company expects over 10 % of its total supply chain portfolio to come from supply chain financing for eCommerce vendors by the end of this year.
In recent years the supply chain financing for vendors of e-commerce companies has been increasing as leading players like SnapDeal and Flipkart are assisting their vendors to manage their finances which, in turn, ensures credible delivery eco-system for the platform.
However, the average size of such financing is only about Rs 20-30 lakh and the business also gets impacted by seasonal trends. This is a reason not many large players and banks have shown a keen interest and the space is therefore left open for the NBFCs largely.

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