The State Bank of India (SBI) has announced the launch of SBI e-Smart SME to offer easy working capital to online merchants. For starters, SBI has tied up with e-commerce major Snapdeal to offer instant loans to its sellers.

“The e-commerce growth has created a new ecosystem enabling more than five lakh sellers to sell product on digital platform. It has also opened up opportunities for the banking industry,” SBI chairman, Arundhati Bhattacharya told newsmen in Mumbai.

The bank is also planning a similar tie-up with Flipkart, Paytm and Amazon, she said.

SBI e-Smart SME will use data analytics gathered by Snapdeal to assess the sellers credit worthiness, instead of traditional lending based on financial statements like balance sheet and income tax returns.

“Through this real time analytics tool we have created with SBI, we can assign a credit score to all sellers on our platforms,” Snapdeal co-founder and CEO Kunal Bahl said.

In one year, through its Capital Assist Programme, Snapdeal had lent over Rs 250 crore to 1,000 sellers. In this year, it is targeting Rs 1,000 crore loans to SMEs, he added.

According to the SBI e-Smart SME scheme, sellers initially will be able to avail loans up to Rs 25 lakh. Loans up to Rs 10 lakh will be collateral free with a competitive interest rate. Women entrepreneurs will have a special concession of 25 basis points.

Loans below Rs 10 lakh will be covered under the Pradhan Mantri Mudra Yojana Scheme.