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Flipkart Growth Capital Disburses $18 Mn Loans To Sellers, Targets $30 Mn By The End Of Festive Season

Flipkart Growth Capital Disburses $18 Mn Loans To Sellers, Targets $30 Mn By The End Of Festive Season

In a bid to expand its seller base, Flipkart launched Flipkart Growth Capital in July 2015. The programme allowed sellers to compare and access capital seamlessly.

According to a company statement, Flipkart Growth Capital, has disbursed loans amounting to over $18.6 Mn (INR 125 Cr) to sellers on its platform in just a year.

Speaking on the success of the programme, Anil Goteti, Head – Marketplace, Flipkart, said, “Availability of finance is one of the major barriers for the growth of small businesses in both online and offline space. Flipkart’s Growth Capital Program addresses that issue and facilitates our sellers by helping them connect with trusted lenders in the industry. Considering the success of the programme and increasing demand for the initiative, we are estimating this to hit the INR 200 Cr ($30 Mn) mark by the end of this festive season.”

Flipkart has partnered with eight financial institutions for the initiative to offer collateral-free loans with interest rates starting at 11.40%. Mobile, electronics, fashion and fashion accessories are the few categories that witnessed the highest adoption for the programme.

In the initial month of its launch, the programme received over 3000 applications. Sellers across India gained access to loans with minimum documentation within a short turnaround time.

The programme has seen major acceptance in North India with close to 60% of the applications coming from the region. Delhi-NCR alone constituted 35% of the volume of applications along with other metro cities as major contributors. Mumbai, Bangalore, Jaipur and Surat also saw a good uptake in the applications.

The ecommerce giant has so far furnished over 800 loans. 80% of the loans were availed through the collateral fee format. Moreover, 95% of the total loans disbursed were overdraft working capital loans that provide ideal repayment flexibility to sellers.

“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,” said Goteti.

Along with Flipkart Growth Capital Program, the company has also launched SBI’s ecommerce SME loan product recently. This is targetted at smaller sellers who are relatively new to credit and therefore can avail this loan by only submitting KYC documents. So far, a total of 50 loans have been sanctioned in a span of two weeks under this initiative.