Industry News

Country’s Largest Lender, SBI, Partners with Snapdeal to Offer Loans to E-Commerce Sellers

India: State Bank of India, largest lender of the country, is launching SBI e-Smart SME, in partnership with one of the e-commerce major, to offer convenient working capital to e-commerce players. 

The bank has tied up with Snapdeal to offer instant loans to its sellers. 

SBI E-Smart SME will use data analytics gathered by Snapdeal for the assessment of the seller’s credit worthiness, rather than following traditional lending based on financial statements like balance sheet and income tax returns. 

Snapdeal have created a new real-time analytics tool with SBI, through which they can assign a credit score to all sellers on its platform. Previously, Snapdeal had lent over INR 250 Crore to more than 1,000 sellers through its Capital Assist Program and now, after partnering with SBI, it is targeting to disburse loan amount of INR 1,000 Crore to SMEs. 

SBI e-Smart SME will help the sellers will be able to avail the loans up to INR 25 Lakhs and there will be a special concession of 25 basis points for women entrepreneurs. 

SBI has hired Boston Consulting Group, a management consulting company, to develop this credit model. 

According to TechSci Research growing e-commerce industry has built a new market space of more than 5 Lakh sellers to sell their products on digital platform. This initiative would open the market opportunities for the banking sector as well. 

The biggest challenge the SMEs faced to raise funds through formal channel is a long history of financial statements or collaterals to give confidence to the lender. This initiative of SBI and Snapdeal will allow e-commerce players to raise funds in a hassle-free manner. 

According to a report published by TechSci Research “India E-commerce Market Forecast & Opportunities, 2020the country’s e-commerce market is projected to grow at a CAGR of more than 36% during 2015-2020. This initiative will act as one of the biggest growth drive for e-commerce market in India.