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The country's largest bank SBI and FMCG major HUL on Thursday announced a partnership to enable easy access to credit to small retailers and also help them join the digitisation bandwagon in order to "survive in the new world".
Under the partnership, HUL's retailers who use the company's Shikhar app will be able to avail of credit facility for payments to distributors through an integration with State Bank of India's (SBI) Yono app.
Hindustan Unilever (HUL) Chairman and Managing Director Sanjiv Mehta said while there are around ten million retailers in India, they have faced constraints in access to credit as they have always operated in an informal environment, while they have also been reluctant to adopt digital technology.
"What our partnership does today is try to solve some of the very important constraints that the retailers and small shopkeepers face in the country today," Mehta said while addressing a virtual press conference.
He further said,"...SBI has agreed to bring forth credit in a very seamless and easy fashion to these retailers without having to go through paperwork so that they can very quickly and in a very easy manner have access to credit. This is going to be a tremendous gamechanger."
HUL's Shikhar app allows retailers to place orders without even the salesman visiting stores, and with COVID-19 intensifying focus on touchless sales, Mehta said the app has proved to be a very big boon with lakhs of retailers across the country. Another important aspect of the partnership, he said, is "cajoling and making the retailers adopt the technology. This we believe is extremely important if they have to survive in the new world".
He said the partnership with SBI will also enable "UPI based payment from our retailers to our distributor" with the interface allowing instant transfer of funds.
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"These are small but very important things in strengthening the ecosystem of the millions of retailers in the country," he added.
SBI Chairman Rajnish Kumar said with the kind of developments which are happening in the country and the digitisation of economy, "this is not only about partnership between the two giants SBI and HUL. This is the shift which is happening in the country in the way we do business and the impact which it will have on the overall productivity..."
He said availing of credit has always been a painful process and the partnership aims to address the issue.
"Today when we are integrating the system, HUL's Shikhar app and SBI's Yono, we are entering into some sort of new age relationship, which is nothing to do with lending money to HUL, (but) is catering to their supply chain," Kumar added.
He said while the model developed with HUL is "unique", going forward, "we will be also using with more corporate partners and at the same time will contribute towards more jobs, more employment opportunities and bringing in efficiencies as far as supply chain and logistics of corporate giants like HUL are concerned."
Both Kumar and Mehta said the partnership was initiated much before COVID-19 and the fact that the pandemic makes it more relevant is clearly coincidental. "Our vision is very clear, it aims to help millions of traders in the country, bring them into the formal economy, help them digitise..." Mehta said.
Kumar also said the partnership with HUL is also a "perfect way of expanding our Mudra loans" considering the banks push for e-Mudra loans.
When asked how many retailers are expected to benefit from the partnership, Mehta said,"Our ambition is very high. We have just kicked off the process...All of you are aware that there are over 10 million retailers (in India). We cover a few million retailers. So our endeavour would be to bring as many retailers as possible into this thing.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
