SBI Partners With HUL To Offer Online Credit To Retailers And Distributors

India’s largest lender and largest consumer goods maker have teamed up to offer online credit to retailers and distributors at a time when pandemic disruptions have caused a credit crunch for small businesses.

The State Bank of India has partnered with Hindustan Unilever Ltd. to provide retailers with online credit of up to Rs 50,000, according to a statement. Merchants who have downloaded HUL’s Shikhar app can take advantage of this feature, which was initially offered in Mumbai and Bangalore and will later be extended to other cities.

The bank said it would offer instant paperless overdraft to retailers for their billings with ATMs. SBI will also install point-of-sale machines at HUL touchpoints in small towns and offer UPI-based support to help retailers make cashless payments to bulk resellers.

Typically, a distributor would give a retailer seven to ten days to pay for inventory. But the Covid-19 lockdown disrupted supply chains and demand, forcing distributors to request upfront payments as they faced a cash shortage. A recovery for general trade, or the channel comprising distributors and small retailers, is crucial for manufacturers of consumer staples as it contributes nearly 90% of sales.

“Our partnership with SBI is a push to deliver digital solutions to important constituents of our ecosystem,” said Sanjiv Mehta, president and CEO of HUL, quoted in the statement. “General commerce is a very important channel for the country because it meets the needs of millions of consumers by providing essential products. “

HUL has attempted to digitize and modernize the channel, support retailers and help them access fast and affordable financing, he said.

SBI said the partnership will help the bank respond to customers in the most remote part of the country. Speaking at a press conference to announce the merger, Rajnish Kumar, Chairman of SBI, said it was a way to expand Mudra loans and would also become a model for supply chain finance in the future.

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David A. Albanese

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