SBI To Invest $150 Mn For MSME-Centric B2B Ecommerce Platform
SBI believes that regulatory clearances may take time as B2B marketplace will not earn any revenue
HDFC has an ecommerce platform, SmartBuy, to help merchants extend discounts to the bank's customers
Government is also looking to set up an ecommerce portal for MSMEs
State Bank of India (SBI) is looking to invest $100 Mn to $150 Mn (INR 750 Cr to INR 1000 Cr) to set up its latest B2B ecommerce marketplace, Bharat Cafe, for micro, small and medium enterprises (MSMEs).
SBI MD Challa Sreenivasulu Setty told Economic Times, that Bharat Craft will be an ecommerce and technology-driven platform which will allow SBI customers to sell their products. The state-run bank is looking to design the platform using the China-based Alibaba and Alipay model to route transactions, despite the government pushing public sector units (PSUs) and private entities to boycott Chinese companies.
SBI believes that the regulatory clearances may come soon as the B2B marketplace will not earn any revenue, but will only help customers banking with its business. The bank will also leverage on its mobile banking offering YONO SBI which allows customers to bank, shop, travel, pay bills, recharge, invest, transfer money, book and travel movie tickets and more. SBI hopes that its latest B2B venture will allow it to manage the financing of small businesses better and give them a greater grip over receivables.
HDFC, too, has an ecommerce platform, SmartBuy, to help merchants make sales, and extend discounts to HDFC Bank's customers across products and services on ecommerce platforms, ticketing platforms, hotel and hospitality businesses.
Last year, MSME minister Nitin Gadkari had announced that the government is looking to set up an ecommerce portal for the Indian MSMEs to take them to the global market. The minister expected the Indian MSMEs to contribute around 50% to the nation's GDP over the next five years, as compared to the current 29%.
"MSMEs are the spine of the economic system and have large potential for employment within the nation. The employment within the MSME sector can be set to extend to 15 Cr from around 11 Cr at current," he added.
Currently, the MSME sector contributes about 45% to manufacturing output, more than 40% of exports, over 28% of the GDP. To provide impetus to the manufacturing sector, the recent National Manufacturing Policy envisaged raising the share of the manufacturing sector in GDP from 16% at present to 25% by the end of 2022. According to DataLabs by Inc42 , the total GVA (gross value added) of the Indian MSME sector by FY'20 is estimated to be $866 Bn, growing at a CAGR of 11.12%.
Save Over $100K On AWS, Hubspot & More With Startup Essentials by Inc42+ Learn More!