e-Commerce giant Amazon has partnered with Bank of Baroda to offer micro loans to small and medium-sized businesses on the platform at low interest rates. Ahead of the festive season which registers huge sale for online retailers, Amazon India will offer small working capital as low as Rs one lakh as a loan at the interest rate of 10.45-11.5 per cent to the sellers on-board.
“Through our engagement with sellers, we realised that 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,” said Amazon India Director and General Manager (seller services) Gopal Pillai.
The micro-lending facility envisions helping small and medium businesses (SMBs) on the platform to offer excellent products at competitive rates to Amazon users. In this regard, the e-Tailer has been testing the micro-lending with Bank of Baroda from last 2-3 months. Over 100 sellers have already participated in the facility.
The platform is already running a seller loan programme in India which it had announced in 2016 to bridge a fast and easy access to working capital for SMBs. Under the programme, Amazon has partnered with YES Bank and Capital First for loan amounts of Rs five lakh to two crore.
The firm’s arm Amazon Seller Services (ASSPL) is bringing in more financial partners so that it can cater to its 225,000 seller base. With the latest Bank of Baroda tie-up, the company wants to cater to every level of sellers with loans which can go up to Rs 25 lakh.
“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 200,000 seller base,” said Bank of Baroda’s Managing Director and CEO P S Jayakumar.
The bank will at present offer the loans on an invite-only basis to the marketplace sellers on basis of performance and aims to meet 20 per cent penetration among Amazon sellers during the festive season.