E-commerce player Amazon said it has tied up with state-run lender Bank of Baroda to offer micro loans to its sellers. The loans will be offered on the invite-only basis to the marketplace sellers.
The programme was piloted by Amazon in July this year in association with the bank. The loans will be extended in the range of Rs one lakh to Rs 25 lakh at an annual interest rate between 18 and 30 per cent.
"We clearly understand the specific needs of SMEs for e-commerce business and are proud to partner with Amazon India to provide comprehensive banking solutions to their over 2 lakh seller base," the bank's managing director and CEO, P S Jayakumar, told reporters here today. He said the bank expects to get on board 15 to 20 per cent of Amason sellers on this programme in the next one year.
The sellers on Amazon will receive pre-approved indicative offers from the bank for the loan amount they are eligible. They will be able to use their sale disbursements on the Amazon marketplace to directly repay the loan. "Through our engagement with sellers, we realized that the lack of financial resources can hinder the growth of small businesses as they scale up which can impact expansion, especially ahead of the festive sales," Amazon India director and general manager (seller services) Gopal Pillai said.
Currently, loans are offered on an invite-only basis to the marketplace sellers who qualify against various criteria, including account tenure, seller's selling history, customer feedback and compliance with the e-commerce player.