In a bid to ensure faster cash cycles for its sellers and vendors post demonetisation, fashion portal LimeRoad has started an initiative that allows the company to make payments within 24 hours as against the earlier monthly cycle.

This is being done to also ensure that small businesses are not impacted due to shortage of cash or capital. LimeRoad claims to be the first among the online players to have introduced the 24-hour-payment policy.

Suchi Mukherjee, founder of LimeRoad, told BusinessLine that the initiative was launched to empower small-scale manufacturers and create a culture of support, especially among predominantly home-grown manufacturers. “This move will increase the vendor’s working capital cycle, thus empowering them to further scale their respective businesses,” she added.

Mukherjee said that the programme was launched in November just after the demonetisation of ₹500 and ₹1,000 denomination notes. LimeRoad pays its vendors within 24 hours after the order is delivered to the customer. The average time of delivery is 4-5 days from the point of origin.

“This has come as a major relief to thousands of sellers/vendors, who are part of the growing e-commerce industry in India, for whom timely payment has been a major concern,” Mukherjee said, adding that all the payments are now done electronically and that about 70 per cent of the vendors have opted for the 24 hours payment services.

BusinessLine spoke to few vendors who said that the initiative has helped them rotate the capital money in their respective business and also helped to do an early reconciliation of their account, which typically is a very long process.

Priyanka Kataria, a seller from Jaipur, said: “It is helping in improving cash flows and furthering payments to fabricators and artisans, which will a great help during this cash crisis when we are seeing delayed payments from almost everybody. Our interest cost will get greatly reduced and we’ll be able to offer more affordable products to our customers, as we can negotiate better prices of raw material by doing faster payments to local fabricators.”

comment COMMENT NOW