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With more than 200K merchants on its platform, ecommerce marketplace Snapdeal is looking to provide capital assist loans worth $1 Bn to its sellers in the next three years, just to ensure that the merchants stay loyal to its (Snapdeal’s) platform.

Snapdeal had launched Capital Assist program last year to provide small merchants access to working capital.

Through this scheme, the ecommerce marketplace is looking to add about 1,000 sellers – every three months. It is targeting a total loan disbursal of INR 6,000 Cr. by the end of 2017-18. For this, Snapdeal has involved over 22 banks and non-banking financial company (NBFC) partners.

In October, the company partnered with the National Institute for Entrepreneurship and Small Business Development (NIESBUD) to empower MSMEs in order to provide capital assist loans worth INR 1,000 Cr. over the next six months.

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“We are financing the loans 100% through banks and NBFC partners. While 70% of the loans are for less than INR 10 lakh, which helps aid a large number of our smaller sellers to grow and expand their business, 30% of loans are for above INR 10 lakh,” said Vijay Ajmera, senior VP, capital assist at Snapdeal.

Under this programme, working capital collateral – free loans amounting to INR 1 lakh to INR 1 Cr. can be availed. These loan offers are made on the basis of sellers’ previous sales history with Snapdeal. The company has already provided loans to large number of sellers in over 300 cities.

With the help of the government, Snapdeal is also looking to provide both – loans to village level entrepreneurs and a platform to sell their products.

To ensure the loans given out do not turn into bad debts, the company has build an analytics programme to check for warning signs that a seller might not be able to pay the loans. “Such early warning systems have ensured we have a return on investment of 13%, which is quite a lot,” Ajmera added.

Other recent developments by Snapdeal includes:

Recently, its rival Flipkart which started a pilot with 250 sellers and disbursed loans worth INR 50 Cr. in collaboration with top banks and financial institutions, is now looking to extend the pilot to all its 80,000 sellers.

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