<p>E-commerce in India, with over 250 million internet users and 900 million mobile subscribers, is witnessing an unprecedented growth and is only set to expand further. Thousands of brands and companies are today selling their products through e-commerce platforms available in India. In the recent past, we have also witnessed the introduction and rise of hyperlocal commerce. These developments have led to creation of a new commercial ecosystem in India, with hundreds small traders, merchants and manufacturers have joining the booming e-commerce bandwagon every day.<br><br>E-commerce marketplaces are placing focus on onboarding new vendors and adding product lines to offer variety and choice to the customers. Online business is a lucrative option for entrepreneurs but to manage the cost of setting up shop online with the top shot e-commerce marketplaces like Flipkart, Snapdeal or Amazon, any first-generation entrepreneur requires a work capital loan.<br> <br>Access to capital at the right time and price often becomes the biggest roadblock for the SMEs. According to a recent study by the Union MSME ministry, only 6% small businesses get finance from organised lenders, indicating the difficulty of small businesses to get loans. Meanwhile, a report collected by the International Finance Corporation (IFC) showed around 41% of SMEs in India do not have access to bank loans or other related products offered by financial institutions. IFC reports a financing demand gap of ?2.93 trillion in the SME sector.<br><br>In the absence of conventional loans for this segment, such entrepreneurs have been reaching out to new age digital lending players. Many e-commerce giants are partnering with Digital Lenders and Non-Banking Finance Companies to extend quick and hassle-free short term loans to ambitious merchants. The advent of these new-age online platforms is emerging as a boon not just for the sellers, but also the e-commerce players. <br><br>Traditionally, many of these sellers have stayed small and unorganised to avoid taxes and regulation and hence, it became impossible for a bank or traditional finance organisation to understand and meet their funding requirements. Digital Lenders have developed comprehensive algorithms to use social footprint and other proxies for credit comfort to assess credit worthiness of the borrowers. The use of technology enables such platforms to service entrepreneurs in the remotest corners of the country.<br><br>Amazon and Flipkart aim to double the sellers on their respective websites to 1 lakh by the end of 2015. Timely allotment of loans to these small businesses will eventually be important for creating and fostering the e-commerce ecosystem. India is already witnessing a change in the way we shop; a revolution in how we look at finance is not far behind.<br><br><em>The author, HarshVardhan Lunia, is Co-founder & CEO of Lendingkart</em></p>
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