Flipkart said it automatically redirects the interested sellers from its portal to a lender’s portal for faster processing of applications and improving sanction and disbursal timelines.
Walmart-owned Flipkart has expanded benefits under its seller financing programme Flipkart Growth Capital for its sellers to raise credit from less than Rs 5 lakh to Rs 5 crore. The company said it has forged new partnerships to help sellers get secured and unsecured credit through “multiple lenders” based on their specific business needs at a 9 per cent interest rate. “With the help of tech synergies across the ecosystem, sanctions happen instantly and disbursals within 24 hours of the application…Sellers partners have leveraged the program’s benefits, resulting in an average loan size increase of 18 per cent YoY,” Flipkart said in a statement. The company didn’t disclose the names of partner lending institutions.
“E-commerce has played a transformational role for sellers and MSMEs in recent years, especially since the pandemic, by providing new avenues for their growth and expansion. The scope and the benefits of the Growth Capital program will help them speed up cash flows and manage procurements better,” Ranjith Boyanapalli, Senior Vice President – Marketplace, Fintech & Payments Group, Flipkart. The company said it automatically redirects the interested sellers from its portal to a lender’s portal for faster processing of applications and improving sanction and disbursal timelines.
Flipkart also introduced an ‘Early Settlement’ option as part of the programme to help sellers manage their cash flows and procurement requirements by enabling them to receive their order payments in advance. The increasing shift in consumer buying from offline to online, which has accelerated since last year due to the pandemic, has enabled small businesses and retailers selling online to reach out to more customers. E-commerce along with other sectors such as online pharmacy, online food delivery, online grocery, and online education have been the biggest beneficiaries of the pandemic.
Ease of credit access by online channels like Flipkart is directed towards pushing online sales of small businesses at a time when the MSME sector has been significantly hit due to lockdowns across the country. Meanwhile, the MSME body Federation of Indian Micro, Small and Medium Enterprises (FISME) had earlier this week had recommended the government to allow retailers home delivery of orders during the lockdown period without a distinction between essential and non-essential products.