Amazon to launch business loan programme for small sellers in eight more countries

Amazon.com Inc is set to launch its business loan programme for small sellers later this year in eight more countries including China, where credit was becoming a key factor in competing for new vendors and expanding market share, Reuters reported.

The e-retailer had till now offered the service only in the US and Japan through Amazon Lending founded in 2012. The company now planned to offer short-term working capital loans in other countries where it operated a third-party seller-run marketplace business, according to the head of Amazon Marketplace, Peter Faricy, who spoke to Reuters.

The countries are Canada, China, France, Germany, India, Italy, Spain and the UK.

The service, on invite-only basis would not be  open to all sellers on Amazon's platform.

Other large retailers including eBay Inc's PayPal and Alibaba Group Holdings, which run third-party marketplaces, too were turning to credit to expand their vendor base.

According to some industry officials who helped lenders assess credit risk, these retailers were taking on risky loans as they did not know the shape of the credit market in which the sellers were operating.

According to William Black, a former US banking regulator and professor of Economics and Law at the Univeristy of Missouri, small business had high failure rates, especially in China and India.