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Amazon Pay to extend micro-financial services like small loans and insurance to Kirana shops

Amazon Pay's new initiative shall not only provide financial security to Kirana stores but also connect them to the e-commerce network. 

Amazon Pay, an online payments processing service owned by Amazon, is planning to aid Kirana shops by facilitating loans and insurance. Kirana stores form an essential chain of merchants throughout India. They sell products and services that cater to the day-to-day requirements of the people.

By extending micro-financial services to Kirana stores, Amazon Pay aims to provide a marketplace for getting easy finances to extend their business and reach out to a wide range of customers. Indian Kirana Stores mostly run offline. The loan facility of Amazon Pay will not only provide financial security to their business but also connect them to the e-commerce network.

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How will Amazon Pay extend loans and insurance to Kirana stores? 

The Amazon Pay for Business application will serve as an important means for facilitating finances to Kirana stores. The app will also allow them to generate their QR codes for conveniently receiving payments from their customers. The company targets to connect around five million offline merchants with the Unified Payments Interface (UPI).

According to Mahendra Nerurkar, Amazon Pay India director and chief executive, “When we think about micro-financial services, kiranas have become a key part for the long tail of merchants; we want to extend these services too. However, we are happy to be an enabler marketplace for these services, with banks, lenders and other financial institutions doing a good job in offering these services”.

How will Amazon Pay extend loans and insurance to Kirana stores? 
How will Amazon Pay extend loans and insurance to Kirana stores?

Amazon plans to bring about a million offline retailers under its Local Shops programme. This will enable these retailers to utilise the power of the internet and scale the visibility of their products. Amazon Pay’s new initiative will help Kirana owners get aware of the micro-financial services and their connected benefits with government schemes to enhance the supply chain and minimise risks.

According to Mahendra Nerurkar, Amazon Pay India director and chief executive, “The two big areas for Amazon Pay are ‘digitizing cash’ and scaling its credit offering. We want to enable customers to consume more and extend credit in a responsible way. The moment you digitize cash for a customer, you will be able to offer more services to them later. And this stands true for SMEs too”.

How does Amazon want to assist Kirana shops?

Amazon Pay aims to bring more than a million offline Kirana stores under its Local Shops programme. Amazon’s ‘Local Shop’ programme was rolled out last year bringing Kirana stores under Amazon’s e-commerce platform. This programme would enable the Kirana owners to expand their customer reach over a larger area.

According to Manish Tiwary, vice president, Amazon India, “What started as a pilot, has now become a pan-India phenomenon enabling local businesses to come online and benefit from technology adoption and e-commerce. The encouraging response to the Local Shops on Amazon program reflects in the rapid scale-up of the program to 50,000+ sellers in less than one year of launch. It underlines how digital enablement and digital inclusion can help them scale and contribute to a digital economy.

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