Country's largest bank SBI today signed pacts with e-commerce player Snapdeal and digital payments firm PayPal for providing cheaper loans and cross- border transaction facility to small and mid-sized businesses.
Under the 'Snapdeal-Capital Assist' programme, sellers or manufacturers on its platform will be able to access liquidity at attractive rates from SBI, with women entrepreneurs getting a further concession of 0.25 per cent. Besides, no collateral will be required for loans up to Rs 1 crore.
"It is a partnership of the equals in which the bank will provide financial assistance to sellers on e-commerce platform," said SBI chairperson Arundhati Bhattacharya, who was present at the MoU signing with Snapdeal.
She said SME sellers were being constrained by liquidity problems and were not being able to ramp up their businesses.
"Even if a business is good, if liquidity is not there then it will not survive," Bhattacharya told reporters here.
Snapdeal CEO Kunal Bahl said the deal will help small businesses as they find it difficult to provide adequate collaterals while seeking loan through the normal route.
"Under the scheme, no collateral would be required for loans up to Rs 1 crore," he said.
Nearly 65 per cent of SBI's business is from alternate channels including digital.
The bank also tied up with PayPal for facilitating secured and convenient cross-border transactions for SBI's 9 lakh SME customers.
State Bank of India managing director B Sriram said the MoU with PayPal will be for cross-border transactions and it will also look at domestic payments matter in future. It will also explore opportunities in e-governance areas.
Country manager of PayPal Vikram Narayan said the company was operating in 203 countries and handles 11.5 million transactions a day.
In future, PayPal would explore opportunities in e-commerce and m-commerce space in India, he said.
Yesterday, SBI had signed an MoU with Amazon to develop payment and commerce solutions for customers and small businesses.
