Reports indicate that Amazon is partnering with a major bank with a view to growing its lending business, Amazon Lending, which mainly provides loans to suppliers of the online retail giant. According to the reports Amazon and Bank of America have joined hands to offer small business loans to merchants who sell on the retailer’s marketplace platform.
The plans to partner with a major bank were first announced by the chief executive officer of Amazon, Jeff Bezos, two years ago in a letter to shareholders. Under the partnership Amazon will be exposed to lower risk and will also be in a position to provide loans to more merchants.
Currently Amazon Lending operates as an invitation-only outfit and the amount of loans range between $1,000 and $750,000 on terms of up to 12 months. It is especially suitable for merchants who would have been turned away by any other traditional lender.
According to Amazon the key goal of the initiative is not to make a profit from interest payments on the loans but to assist merchants move more inventory. In the 12-month period which closed last year in June Amazon lent out over $1 billion compared to amounts totaling $1.5 billion lent out in the four years that had preceded.
An annual report released earlier this month however showed that Amazon Lending has been recording slowing growth. However this was attributed to a deliberate decision by the Seattle, Washington-based e-commerce giant to scale back.
Amazon’s partnership with Bank of America comes in the wake of a report indicating that the video offering of the online retail giant has overtaken Netflix in India despite the latter having entered the market one year earlier. Per a survey conducted by research firm IHS Markit, the share of the online video streaming market that Amazon Prime Video commanded was close to 10% having garnered more than 610,000 subscribers. Netflix on the other hand had 8% market share.
Part of the reason why Amazon Prime Video has done better than Netflix in India is that it has more local content compared to Netflix. On Amazon the percentage of English titles is less than 65% and 25% of the content is Hindi. Netflix on the other hand has 75% of its content being English titles, little Hindi content and almost non-existent regional content.
“The one mistake many OTT service providers make when entering India is only hosting western content, or only extending their regional offering to Bollywood movies,” Curt Marvis, the co-founder and chief executive officer of QYOU Media, said.