Global ecommerce biggie Amazon is trying hard to become the numero uno player in the Indian ecommerce market by beating its arch rival Flipkart. Understanding that the best way to achieve this faster is by maintaining a wide variety of sellers on its platform, the American giant has decided to offer micro loans to its sellers. The firm has even tied with state-run lender Bank of Baroda for the same.

According to a report in the Economic Times (ET), the programme was piloted by Amazon in July this year in association with the bank. Under the programme, Amazon will be offering the loans to the marketplace sellers on invite-only basis. Amazon sellers will be receiving pre-approved indicative offers from the bank for the loan amount that they are eligible. The sellers will be able to make use of their sale disbursements on Amazon's platform to directly repay the loans that they have taken.

"We clearly understand the specific needs of SMEs for e-commerce business and are proud to partner with Amazon India to provide comprehensive banking solutions to their over 2 lakh seller base," said Bank of Baroda's managing director and CEO, P S Jayakumar.

The programme will see Bank of Baroda extending loans in the range of Rs one lakh to Rs 25 lakh at an annual interest rates between 18 and 30 per cent. The bank is hoping to enrol 15 to 20 per cent of Amazon's sellers in this programme by next 12 months.

Commenting on the new initiative, Amazon India director and general manager (seller services) Gopal Pillai said, "Through our engagement with sellers, we realised that the lack of financial resources can hinder the growth of small businesses as they scale up which can impact expansion, especially ahead of the festive sales."

Amazon seems to have taken a great liking for the Indian market. After deciding to double its office space in India by next year and setting up its largest standalone Fashion Imaging Studio called BLINK in India's Gurgaon recently, the global ecommerce giant is reportedly also planning on setting up Lab126, its secretive consumer devices development arm in the country's financial capital, Mumbai.

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