Amazon.com Decides To Expand Loan Facility To Eight More Countries

Amazon.com has a program in place to offer loans to small sellers in the United States and Japan to help them with their business by offering them working capital. The company recently announced that it plans to extend its loan program to another eight countries and China will be one of these eight countries.

The e-commerce industry in the Chinese market is growing at a rapid pace and there is fierce competition to amongst leading e-commerce players to capture market share. By offering small business owners a loan facility, Amazon hopes to attract more vendors in China and the remaining seven countries enabling it to build a bigger vendor database in these markets and attract more customers.

The other seven countries where the loan facility will be made available are the United Kingdom, India, Germany, Canada, Spain and Italy. Amazon will now make the loan facility eligible to all sellers but will use an invite-only system to offer a loan facility. China’s Alibaba Group Holdings and eBay Inc’s Paypal are other companies who also offer a loan facility to third party vendors.

Amazon will offer loans on a 3 to 6 month installment plan and the amounts will range between $1,000 to $600,000 to provide vendors with additional capital to help them buy new inventory. The company will charge interest on the loan amount and also take a percentage on the sale of each item.

In a statement, Gil Luria, analyst with Wedbush Securities in Los Angeles said “Amazon has very little share in China and they haven’t been able to break out of that, so this is a very important necessary step for them to be able to grow”.