On Wednesday, Snapdeal is slated to sign a memorandum of understanding (MOU) with Small Industries Development bank of India (Sidbi).
The e-commerce sector in India is booming right now. With homegrown online portals gaining popularity and international platforms setting shop in India, more and more businesses are planning to climb onto the bandwagon to offer their products online. According to a recent report by Morgan Stanley, online shopping penetration in India is likely to increase to 36% by 2020 from 9% in 2013, primarily led by mobile users. It, then, wouldbn't be wise to keep your products out of the online arena.
When Rahul Vasdev (name changed), owner of a home decor company, wanted to list his products on e-commerce websites, he listed out the leading e-commerce websites in India. After due diligence, he zeroed in on Amazon.com and could easily list his company on the website, as a seller. Although the paper work took some time to come through, the overall process, he said, was pretty smooth. Most importantly, Vasdev had the adequate capital required to back his move.
Everyone is not so fortunate. This is especially true for small and medium business owners. Ease of procedure and protocol is only an added advantage if the company has adequate capital to move on to the online space in the first place. Compared to big or established businesses, it is difficult for small businesses to get a loan from banks. This is because the company may not have been around for too long, hence might not have much credibility or might not have much collateral to secure a loan from banks.
It is for this purpose that e-commerce websites are tying up with non-banking finance companies (NBFCs) like Capital Float, NeoGrowth and Capital First, as well as online finance companies such as Lendingkart and loan facilitators like SMEcorner, to offer sellers quick and hassle free loans.
On Wednesday, Snapdeal is slated to sign a memorandum of understanding (MOU) with Small Industries Development bank of India (Sidbi).
"Small businesses struggle to get loans. With e-commerce becoming more mainstream, it is encouraging several entrepreneurs to set up businesses online," SMEcorner founder and chief executive Samir Bhatia told PTI.
SMECorner has tied up with Snapdeal, Flipkart, eBay, Paytm, among other e-commerce players to play the role of a catalyst to secure easier loans for sellers, he said.
In May, State Bank of India tied up with Amazon India to help e-commerce sellers access easy loans.
Both Flipkart and Amazon had stated earlier this year that they aimed to more than double the number of sellers on their platforms to one lakh each by the end of the year, while Snapdeal has targeted to get over 10 lakh sellers on board over the next three years.
This move has the potential to help more and more start ups and small businesses to become sellers on e-commerce websites with ease.
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