Tuesday 30 August 2016

Flipkart disburses Rs 125 cr of loans to support sellers; to touch Rs 200 cr mark

Under its ‘Growth Capital’ initiative launched in July last year, Flipkart has given out loans worth Rs. 125 crore to over 800 sellers over the last one year.
The main aim of this initiative was to offer financial assistance to sellers across the country with minimum documentation and in less time. And according to Flipkart, many vendors on the platform has benefitted from it.
“Unavailability of finance is one of the major barriers for the growth of small businesses in both online and offline space. The programme addresses that issue and facilitates our sellers by helping them connect with trusted lenders in the industry,” said Anil Goteti, Head of Marketplace at Flipkart.

Highlights of the Growth Capital lending program

  • Flipkart partnered with State Bank of India, Axis Bank Ltd, Bajaj Finserv, Yes Bank Ltd, LendingKart and three other financial institutions
  • Offers collateral-free loans at 11.4% interest rate
  • Received over 3000 applications within the first few months of the launch
  • Maximum adoption among vendors selling mobile phones, other electronics, fashion and fashion accessories

More loans up for grabs ahead of festive season

The etailer is expecting to hit the Rs. 200 crore mark by disbursing Rs 75 crore of loans more by the end of the upcoming festive season.
“Considering the success of the programme and increasing demand for the initiative, we are estimating this to hit the Rs.200 crore mark by the end of this festive season. We are also planning to launch promotional offers with our lenders for the festive season in the following two months. This will definitely enable our sellers to grow their business and provide quality products to millions of customers shopping on the platform,” shared Goteti.

Jekyll and Hyde mode of Flipkart

Through initiatives like Growth Capital, Flipkart is sending out a message that it wants to assist sellers in growing their business and increase its seller base. On the other hand, by partnering with few selected vendors and adopting an inventory-based model, the etailer is also alienating its 90,000 sellers.
It’s great that Flipkart wants to helps SMEs by offering financial assistance. But what about sellers that are reeling under huge debt burden because of the marketplace’s skewed policies and unethical practices? Will there be any initiative from Flipkart’s end that will work towards correcting its unfair policies?

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