Amazon India on Wednesday unveiled its ‘Seller Lending Network,’ further scaling its ‘Seller Lending program’ introduced in 2016. This would offer sellers on Amazon.in loan options from multiple third-party lenders.
The online retailer said the network would provide wider selection, wherein sellers can choose loan offers tailored for their business needs from multiple lenders and loan types. Amazon India said sellers stand to save about 150-250 bps (basis points) on interest rates due to competitive rates offered by the lenders.
Amazon also said sellers can now avail loans via an online application process with minimal documentation. This includes a very quick loan approval process of 2-3 days for new loans and intra-day approval for existing loan renewals.
“What we wanted to remove is a lack of working capital [for sellers] as a reason not to start selling online. We started this programme in 2016. Two years later we noticed there is an opportunity to make this programme even better,” said Gopal Pillai, general manager and director, seller services, Amazon India.
Machine learning
The Seller Lending Network also has Lender Central, a portal for lenders (similar to Seller Central for sellers), to facilitate exchange of information between lenders and Amazon. This facilitates information about seller performance data, loan application status and loan portfolio details. In addition, lenders can track the performance of a seller on Amazon.in real-time, thereby allowing lenders to better assess the sellers and make loan-decisioning models more comprehensive.
Lenders also benefit from Amazon’s machine learning models that provide early warning signals and help them maintain a high-quality loan book, the company said.
“We have a very proven algorithm that predicts the seller's capability to repay based on their historical performance,” said Mr. Pillai.
Currently, Aditya Birla Finance, Bank of Baroda, Capital First, Capital Float, Flexiloans, and Yes Bank are part of the lending program, offering loans to thousands of sellers through Seller Lending Network. Amazon said the lending partners benefit from access to a pool of customers, seamless data exchange and loan repayment, thereby simplifying and reducing their operational overheads. Mr.Pillai said the banks and non-banking financial companies don’t see Amazon as a competitor.
“They are our partners [and] also our customers. What we are able to transform is the intelligence we can give to the banks based on the seller’s historical performance in the marketplace… for them to get the confidence to give it [loan],” he said.
Since its launch in June 2013 with a few hundred sellers, Amazon India said there are over 3,40,000 sellers selling on its marketplace. These sellers have listed more than 170 million products on Amazon.in.
