India’s largest commercial bank State Bank of India (SBI) on Thursday inked an initial seller financing agreement with e-commerce portal Snapdeal.
Under the agreement, SBI would offer credit to sellers registered on the e-commerce portal at easier interest rates. However, bank chairman Arundhati Bhattacharya said the interest rates to the sellers as well as their creditworthiness would be based on the “profiles” submitted by Snapdeal to SBI.
“One of the biggest problems (for small-scale sellers) is liquidity (of money). If people don’t have liquidity, no matter what business, it (the business) cannot exist. That is what we would like to provide,” Bhattacharya told mediapersons here.
She observed that if small-scale traders did not have proper access to the market, their survival in business became a challenge.
The bank would provide “hassle-free loans to traders and manufacturers” under the financing agreement with Snapdeal to scale up their business levels. On offer would be a concession of 0.25 percent in interest rate for women entrepreneurs.
Snapdeal presently has 150,000 sellers registered on its portal. No collateral security would be required for manufacturing units upto a limit of Rs.100 lakh, whereas the limit for traders has been fixed at Rs.25 lakh.
Snapdeal’s chief executive officer Kunal Bahl said it was in talks with the SBI to roll out other schemes and programmes.
The bank has a micro small and medium enterprises loan book of nearly Rs.1,679 billion at the end of the third quarter of the last fiscal. Bhattacharya said the state-owned bank was considering other partnerships of this level in the near future.
“When financing becomes better and available at lower costs, the consumer also gets the product at lower prices,” she said.