Amazon's new service allows Indian sellers to get third party loans through the company

  • Amazon India has launched a new online platform where sellers can apply for loans online, called the Selling Lending Network (SLN).
  • The SLN offers a wide variety of loans at ‘competitive’ interest rates that range between 11% to 15%.
  • Seller Central, a component of SLN, uses machine learning to determine a seller’s capacity to repay a loan.
Amazon is going to start lending money to its sellers in India. With its new lending platform, sellers can now apply for loans directly from Amazon India using the company’s new Seller Lending Network (SLN). Having partnered with Aditya Birla Finance, Bank of Baroda, Capital First, Capital Float, Flexiloans and Yes Bank, the company is expanding the financial tools available to vendors on its site.

When applying for a loan, sellers will have a choice between different third-party lenders. The options could vary in terms of interest rates and the type of loans available. This could be collateral free term loans or overdraft loans that extend to anywhere between Rs 200,000 to Rs 50 million with interest rates between 11% and 15%.

Lender Central

Lender Central is a single window where lenders can view seller performance data, the status of loan applications and a detailed loan portfolio.

There’s a real-time component where lenders can view the performance of sellers on as it happens. The aim of providing this data is so that lenders are better informed about their decisions and can fashion their loan decision-making models accordingly.

As with most tech companies, Amazon is utilising machine learning capabilities in Lender Central.

According to the company, using machine learning models, they can issue early warning signals and implement qualitative improvements to a lender’s loan book. The algorithm calculates the seller’s capability to repay loans based on their past performance in the marketplace.

Doesn’t Amazon already have a lending program?

The company’s original loan service, called the Seller Lending Program, was launched in 2016 on a similar framework as the lending service provided by its US portal. But that service is limited to small business entrepreneurs and is an ‘invite-only’ proposition.

On the other hand, SLN is an ‘India-first’ initiative by the company. It allows all sellers on the e-commerce platform to apply for loans and they can initiate the process by filling out an online application.

The underlying condition seems to be that sellers should have a business history with Amazon India of 4-6 months.
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