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Snapdeal dangles Rs 1k cr loan to draw sellers
Jan '16
E-commerce major Snapdeal is looking to disburse loans worth Rs 1,000 crore over the next six months to its sellers in a move to attract more merchants to sell on its platform.

For a quick and efficient disbursal process, Snapdeal has eliminated paperwork such as financial statements and collaterals, and has instead, developed an industry-first credit rating engine on the lines of CIBIL that uses big data algorithms to detect risk behaviour and payback capability of borrowers by tracking their transaction history and customer feedback.

"There are similar credit rating engines used in Europe and the US such as Kreditech and Kabbage. This is the first time that such an innovative credit rating engine has been developed in India to provide cash to merchants," said Vijay Ajmera, senior VP, Capital Assist programme, Snapdeal. The company is in talks with several banks wishing to lend to online sellers for the adoption of the rating engine.

Snapdeal's Capital Assist loans come with a rate of interest that is at least 2-3 per cent lower than what online sellers would otherwise get from banks. "We have disbursed more than Rs 300 crore worth of loans already," said Ajmera. Around 70 per cent 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. "Loans as small as Rs 30,000 have been sanctioned to help small businesses scale up from scratch. They aid our smaller sellers grow and expand their businesses," said Ajmera. "They even help them stay loyal."

For e-commerce players, sellers are vital cogs in the online supply chain because a higher number of sellers on the platform means a wider collection of products and categories for the end customer. (SH)

Fibre2Fashion News Desk - India

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