In India Amazon launches lending platform for sellers and lenders wherein sellers can choose from competitive rates and loan offers to get term loans or overdraft. It will also open its APIs to lenders to plug in and lend to the sellers as part of the new programme, called the Seller Lending Network.
India will be the first geography for Amazon where it has launched such a seller platform. In the US, Amazon lends on its own books.In India Amazon launches lending platform for sellers and currently it has six lenders on the platform — Capital First, Capital Float, Bank of Baroda, Aditya Birla Finance, Yes Bank and FlexiLoans. Interestingly, Amazon recently invested Rs 144 crore into Capital Float which is an NBFC that lends to small and medium businesses and also runs its own lending marketplace model. However, Gopal Pillai, director of seller services for Amazon India, said there will be no special preference given to Capital Float as a seller, and that Amazon will be using its own technology for analyzing seller data on its platform.
While Amazon’s sellers will get access to this lending platform through their current seller portal on the e-commerce website, the company is also creating a separate lending platform for its lenders, to be called Lender Central, to share seller information and performance updates on a real-time basis that’s why Amazon launches lending platform for sellers.While Amazon had started its seller lending programme in 2016, it only facilitated a fixed loan to a seller from a lender.
“Our algorithms help identify good sellers by looking at data such as inventory pattern, stock at fulfillment centres, number of listings, repayment trend, among other things. We have found that within four months we are able to make a fairly accurate assessment of the credit worthiness of our sellers,” said Pillai.Amazon India said it is looking at on boarding more lenders onto the platform and to see if ticket sizes of the loans can be below Rs 2 lakh and Amazon launches lending platform for sellers..
“We see the need for loans between Rs 50,000 – Rs 1 lakh but we have to find lenders willing to service such small ticket size loans. We are also looking at if lenders can lower rates from current 12-14% to 10% for deserving sellers,” he said.