New | Amazon looks to launch loan programme in China, 7 other countries

Amazon.com will start a business loan programme for small sellers in the United Kingdom on Tuesday and is looking to launch it this year in seven more countries including China.

Until now, the e-retailer has offered the service only in the United States and Japan. Amazon Lending, founded in 2012, plans to offer short-term working capital loans in other countries where it operates a third-party, seller-run marketplace business, the head of Amazon Marketplace, Peter Faricy, told Reuters.

The countries are Canada, France, Germany, India, Italy, Spain and China, where credit is becoming a key factor in competing for new vendors and grabbing market share.

The service is on an invite-only basis and is not open to all sellers on Amazon’s platform.

Other large retailers including eBay Inc’s PayPal and Alibaba Group which run third-party marketplaces, are also turning to credit to boost their vendor base.

Some lending industry officials who help lenders assess credit risk say these retailers are taking on risky loans because they do not know the credit markets in which the sellers are operating.

Small businesses have high failure rates, especially in China and India, added William Black, a former US banking regulator and professor at the University of Missouri.