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The partnership will enable adoption of digital payments among HUL retailers, small entrepreneurs in semi urban and rural areas. Photo: Mint
The partnership will enable adoption of digital payments among HUL retailers, small entrepreneurs in semi urban and rural areas. Photo: Mint

SBI, HUL partner to provide digital solutions to small retailers

  • SBI will provide paperless instant overdraft facility to retailers to enable payments to distributors and UPI-based solutions to HUL's retailers to assist with cashless payments

NEW DELHI: The country’s largest lender State Bank of India (SBI) has partnered with India’s top packaged consumer goods company Hindustan Unilever Ltd (HUL) to offer digital payment and financing solutions for small store owners and distributors of the company's products.

SBI will provide paperless instant overdraft facility to retailers to enable payments to distributors. It will also provide UPI-based solutions to HUL's retailers to assist with cashless payments. The move that was announced jointly by HUL and SBI on Thursday will begin as a pilot starting in the cities of Bengaluru and Mumbai.

HUL has a wide distribution network in India and reaches out to millions of outlets selling brands such as Dove, Kissan, Lux soaps, Rin detergent etc.

Under this collaboration, the bank will offer instant paperless overdraft facility of up to Rs. 50,000 to retailers for their billings with distributors as well as financing facility to HUL’s distributors, the consumer goods company said in a statement .

"To ensure customers get the option of digital payments in smaller towns as well, the bank will install SBI Point of Sale machines at multiple HUL touch points across the country. Additionally, SBI will provide UPI based solutions to HUL retailers for instant cashless payments to their dealers from HUL’s retailer application “Shikhar"," HUL said in its statement.

The partnership will enable adoption of digital payments among HUL retailers, small entrepreneurs in semi urban and rural areas, the company said.

"SBI has always been working towards serving the last mile customers and similar is the case with HUL which caters to its customers in the remotest part of the country. We are glad that SBI has got an opportunity to leverage its strong geographic presence and strategic digital solutions to simplify financial needs of HUL’s customers, retailers, dealers and employees," Rajnish Kumar, Chairman, SBI said.

Digitizing India’s general trade ecosystem is now relevant especially as covid is pushing retailers and consumers to do more transactions online.

“General trade is a very important channel for the country as it serves the needs of millions of consumers by making essential products available. This channel also plays a significant role for our economy by creating employment opportunities for a wide spectrum of people. It is our endeavour to digitise and modernise this channel; support the retailers with right assortment and enable them to access timely and affordable funding. The timing of the partnership could not have been better as this addresses one of the key needs for retailers and distributors, given the economic fallout of the pandemic," Sanjiv Mehta, Chairman & Managing Director, HUL, said.

India's FMCG market is largely reliant on the country's general trade or small mom-pop stores for sales.

“There are a few constraints when we look at these ecosystems. One is, they have historically been working in an environment which is informal. Second important bit is because they work in an informal (environment), they always have a constraint of not having access to credit. And third, very important, there is a reluctance to adopt the new technology. So, I think what our partnership does is to solve some of the very important constraints that retailers and the small shopkeepers are facing in the country today," Mehta said at a virtual press conference.

Small neighbourhood stores are being lured by several start-ups and large e-commerce companies that are trying to push some form of digitization in the back-end that could, for instance, help them manage their inventory, place orders and make payments online. HUL too runs the Shikhar app, an online ordering platform designed for its retailers.

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