Making loans to SME seemed like a straightforward win for Amazon

Making loans to the small businesses selling through its website seemed like a straightforward win for Amazon. After all, the US tech giant has granular trading data to help it assess the credit worthiness of the millions of independent sellers on its site. But eight years after it launched, Amazon Lending, which offered annual loans at interest rates of between 6 per cent and 17 per cent, is languishing… Now Amazon appears to be gearing up for round two, having placed job ads for dozens of positions across Europe, Asia and at its Seattle headquarters… Amazon has been notoriously secretive about its financial services projects — Amazon Lending does not have a public website… Its critics are not convinced that its second push will be more successful than the first, and said Amazon relies too heavily on its own data, on sellers’ inventories and cash flow, and it only has a partial picture of credit worthiness… Amazon is also designing an “entirely new” customer experience for borrowers, working on new types of loan and planning new international expansion… While Amazon’s growth has slowed, competition in the business lending space has grown rapidly. New capital rules introduced after the financial crisis made it harder for small firms to get credit from established banks, but nonbank lenders are increasingly filling the gap.
Nicholas Megaw