Merchants on e-commerce sites in need of Rs 1,500 crore credit: RedSeer

E-commerce companies in India have over 4.5 lakh e-sellers listed on their platforms. However, a minority of these e-sellers achieve gross merchandising value (GMV) sales that the e-commerce companies claim to achieve.

RedSeer Management Consulting, in its report dated January 12, 2017 said that top e-sellers achieve GMV sales of Rs 2.5 lakh every month. However, majority of e-sellers are inactive and are registered with e-commerce websites but have no sales to show for over three months.

Gross merchandise volume or GMV is a term used in online retailing to indicate a total sales dollar value for merchandise sold through a particular marketplace over a certain time frame.

Almost all merchants expressed the need for business credit, however, only a few of these merchants have the credit-worthiness to be avail loans from banks and other institutions. 

Over the past year, financial institutions have disbursed about Rs 700 crore worth of loans in partnership with leading e-tailing platforms such as Flipkart and Amazon.

On the other hand, about 10-15% of these applicants eventually go to informal channels such as private moneylenders to avail credit at exorbitant interest rates.

There is an addressable need of Rs 1,500 crore of credit to e-sellers in India, RedSeer said. 

Anil Kumar, CEO, RedSeer Consulting said, “E-sellers will remain a target segment for lenders over the next year. Innovation will continue to be oriented towards lead generation and state-of-the-art credit scoring. However, most new-age businesses have focused only on automating existing offline processes through technology. The next big bet is on creating a product beyond traditional offers, that is palatable to the small business owner – to make an offer the merchant cannot refuse.”