Alibaba provides loan to British buyers

Alibaba, China's huge e-commerce giant, has just formed a strategic finance partnership with Ezbob, a UK based financial provider. This deal means that British companies will be able to buy things in bulk through Alibaba's website on credit, which Alibaba hope will help smaller British businesses.

Ezbob, the trading name for Orange Money Ltd, is a UK-based financial provider that offers financing through a web portal for small and medium enterprisess. This is the first time Alibaba has set up a deal in Europe to offer credit to smaller enterprises.

Under this new partnership with Ezbob, as well as Iwoca, another online lender, British businesses will be given credit of up to ￡120,000, which will let them buy products from Alibaba's manufacturers using this credit, which can be paid back later.

If going through Iwoca, buyers will be able to take loans of up to ￡50,000 and will have up to six months to pay this back. If going through Ezbob, buyers will be able to take loans from ￡50,000 up to ￡120,000 and have a period of fifteen months to pay it back. Iwoca said that they estimate that within the next year there will be around ￡100 million of loans from this cooperation.

Alibaba just last month made a similar partnership with American P2P company The Lending Club. Businesses that use this service will pay between 0.5%-2.4% of interest per month.

Duan Wei, Alibaba's head of European marketing and business development, said that America and Britain are their two biggest markets outside of China, and these types of cooperation deals will only spread.

Alibaba's biggest competition is now Amazon and Ebay.