Alibaba-owned Southeast Asian e-commerce marketplace Lazada has partnered with business financing startup Finaxar to launch a loan scheme for Lazada sellers in Singapore.
Finaxar announced that these sellers can now apply for loans directly online through the Finaxar Merchant Credit Line that’s integrated into the Lazada platform. Approvals “can be as quick as 30 minutes”, the firm claims. This, it says, helps small and medium enterprises (SMEs), especially those operating online businesses, who might find it challenging to borrow from established financial institutions like banks.
E-commerce sellers normally use such loans to procure inventory, increase customer support and expand their businesses.
To assess whether an online seller qualifies for the loan, Finexar looks at cash-flow data. Its credit assessment models factor in things like invoices, orders, and other transaction data, Finaxar co-founder Tan Sian Wee tells KrASIA. But he says the firm also uses other sources of data to improve its algorithms on a regular basis.
Tan says that the credit line will be launched in Singapore first and rolled out to other countries in the future.
Takeaways:
— Lazada sellers in Singapore can now apply for business loans powered by Finaxar, which is directly integrated with the marketplace’s API. The feature will be rolled out to other countries later.
— Sellers using the MCL typically use the funds to procure inventory, increase customer support and expand their online businesses.
— Increasingly, e-commerce marketplaces are working on partnerships with fintech firms to improve its services for both shoppers and sellers. An example is installment payment plans for shoppers. Sellers, on the other hand, can now apply for loans to grow their online businesses. Lazada seems to have worked out a similar partnership in Indonesia as well with Modalku, which is part of the Singapore-based Funding Societies.
Editor: Nadine Freischlad