Snapdeal plans to give out Rs 1,000 crores loans to attract sellers

Snapdeal will now disburse loans worth Rs 1,000 crores in the next six months to its sellers. This would, the e-commerce site hopes, will attract more people to sell on its platform. Cumbersome paperwork like financial statements and collaterals have been done away with. To make the process smooth and fast, the company has developed a credit rating engine on the lines of CIBIL that use big data algorithms to detect risk behaviour and payback capability of borrowers.

The loans come with a rate of interest that is 2-3 per cent lower than what most online sellers would get from banks. Already, the company has disbursed loans worth more than Rs 300 crore, of which 70 per cent are less than Rs 10 lakh. Also, 1,200 out of a total of 2.5 lakh sellers on Snapdeal have signed up for loans. Vijay Ajmera, senior VP, Capital Assist programme, Snapdeal, points out that ‘loans as small as Rs 30,000 has been sanctioned to help businessmen scale up from scratch’. Not only do these loans help small sellers grow and expand businesses but also it helps them to stay loyal.

Last year in December, Alibaba announced plans to double the number of small and medium enterprises from India on its platforms. It promised to provide a 360-degree support system, which included financial training to small businesses in India looking at scaling up. The company has a stake in Snapdeal.