NEW DELHI: Snapdeal, the country’s largest online marketplace, has signed a memorandum of understanding with Small Industries Development Bank of India (SIDBI), which will see the state-owned financial institution join the e-commerce company’s ambitious Capital Assist initiative.
The MoU was signed by Snapdeal Co-founder and Chief Executive Kunal Bahl, and Kshatrapati Shivaji, chairman and managing director of SIDBI in Mumbai on Tuesday.
Capital Assist, which was launched in August last year, offers Snapdeal sellers customized financing options, based on their business category and requirements.
“Through this partnership with SIDBI, Snapdeal will provide small and medium-sized businesses the necessary financial and non-financial support to help expand their business and reach,” Bahl was quoted as stating in a press release.
SIDBI, which focuses on providing capital to the country’s micro, small and medium-sized enterprises, will join other leading banks and non-banking financial institutions that are part of Snapdeal’s Capital Assist programme, created to provide credit to MSMEs transacting on the e-commerce company’s platform.
Other public and private sector banks and NBFCs that have also joined the initiative include, State Bank of India, Axis Bank, ICICI Bank, HDFC Bank, RBL, Religare and L&T Finance.
As per the terms of the MoU signed between Snapdeal and SIDBI, both entities will provide MSMEs, the necessary financial and non-financial support to help expand their business and reach.
Apart from joining Capital Assist, Snapdeal and SIDBI will also look to identify and fill financial gaps that have resulted in India’s 1.5 million SMEs, which contribute close to 8% of the country’s GDP, facing massive hurdles in accessing low-cost capital.
Financial services are an increasingly critical area for New Delhi-headquartered Snapdeal, which is currently in the process of evolving from just an e-commerce company, to creating a complete ecosystem of products and services.
In April, the company picked up a majority stake in digital financial services platform RupeePower.com for an undisclosed sum.
“India is a powerhouse of talent and resources, and if channelized well, the SMBs community in India has the caliber of being one of the front runners in the digital story of the country,” Bahl said.
In March, Snapdeal had announced that sellers on its marketplace platform had raised about Rs 50 crore through the Capital Assist initiative, and close to 150 of its sellers had benefitted from the programme.
Snapdeal, which is backed by a list of marquee investors, such as Japan’s SoftBank, eBay, PremjiInvest and BlackRock, amongst others, currently has about 150,000 sellers on its platform, and has a stated aim of bringing a million sellers on board over the next two-to three years.