Flipkart today announced having disbursed loans worth over Rs 125 crore to more than 800 sellers in the year since it launched the Growth Capital programme.
The Bengaluru-based e-commerce player has tied up with eight financial institutions for this financing initiative and offers collateral-free loans with interest rates starting at 11.40 percent. The categories which have received highest adoption include mobile, electronics, and fashion.
Launched in July 2015, the programme has so far furnished over 800 loans, 80 percent of which were availed through the collateral fee format. Moreover, 95 percent of the total loans disbursed are overdraft working capital loans that provide ideal repayment flexibility to sellers. Commenting on 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 programme 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 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.
In a statement, the e-commerce pioneer which recently faced multiple mark-ups and mark-downs said that the programme has seen major acceptance in North India with close to 60 percent of the applications coming in from the region. Delhi-NCR contributes 35 percent, while Mumbai, Bengaluru, Jaipur, and Surat also saw a good uptake in the applications. Tier II towns like Meerut, Tirupur, Erode, and Salem were also upbeat about it.
Flipkart’s other recent initiatives
The company also recently launched SBI's e-commerce SME loan product which will cater to the 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 under this initiative in a span of two weeks.
The company also launched Flipkart Assured, a quality and speed assurance programme which aims to ensure that high quality products are delivered within two to four days. This was after their biggest rival Amazon launched the Amazon Prime membership programme, operational in over 100 cities and with which consumers can enjoy unlimited free one-day and two-day delivery, in India.
Apart from launching initiatives that compete with those of its rival, Flipkart has also taken a step closer to Amazon by opening an office in Palo Alto, California.
The company which employs around 35,000 had recently laid off 300-400 people from across verticals. Flipkart had then claimed that it was not a layoff but standard procedure following the biannual performance evaluations.
Soon after this grabbed headlines, a town hall meeting was reportedly held at the Flipkart cafeteria which turned the heat up. As CEO Binny Bansal was addressing the full house and discussing failures, to everyone’s surprise Sachin Bansal stepped up and defended the management saying that even he stepped down as the CEO as it was performance-linked.