Reliance Commercial Finance ties up with ecommerce giants

Playing big around supply chain financing for ecommerce vendors, now Reliance Commercial Finance (RCF) has tied up with Snapdeal and is in news to associate with other major ecommerce giants including Flipkart and Amazon.

According to RCF’s Chief Executive Officer – K. V. Srinivasan, ecommerce is a budding opportunity that integrates with thousands of suppliers in providing product request and ensure the delivery. This new ecommerce centric supply chain financing product will offer customized options to these vendors.

In its first phase, a set of more than 80,000 Snapdeal vendors will be offered supply chain financing across the country, by this Anil Ambani-led financial services. From supply chain financing, Reliance Commercial Finance has a Rs. 1000 crore book at present which is expected to have a 50% jump and be the Rs. 1,500 crore one by the end of this calendar year.

Apart from this, RCF is also planning to tie up with other prominent etailers with time. To expand this supply chain financing portfolio, they have already initialized the discussions with Amazon and Flipkart.

According to an industry estimation, ecommerce is an opportunity of USD 38 billion and has a potential of growing at a rapid rate in India. These ecommerce giants manage the vendors across categories and around 5% of them have strong credentials and are eligible for providing financing solutions. So the portfolio would offer a very good opportunity for the lending firms. Plus, these ecommerce companies do help their vendors with managing their finances and that is how, supply chain financing for vendors of ecommerce companies has been gaining momentum in recent years.

But on a sad side, the average size of such financing is just about Rs. 20 to 30 lakh and the business also gets affected by seasonal trends. As a result, not a keen interest has been shown by many large players as well as banks. And hence, this space is left open largely for the Non-Banking Financial Companies (NBFCs).