India’s Supply Chain Ecosystem Gains New Financing Options

Microbusinesses and small- to medium-sized businesses (SMBs) are key to India’s economy, yet they have difficulty accessing finance.

KredX aims to provide a solution.

In 2015, the company launched an invoice discounting marketplace that connects verified vendors with investors. On the marketplace, businesses list their unpaid invoices and can get cash from investors within 24 to 48 hours.

“We provide a unique alternative financing solution for businesses while offering investors an innovative alternative investment option that ensures healthy portfolio diversification,” KredX CEO Manish Kumar told PYMNTS.

In its first six years, the company helped 23,000 businesses and discounted more than 1 million invoices. Now it has expanded its services, adding new solutions to its product suite and rebranding itself as a one-stop solution for supply chain financing.

“Being a complete supply chain finance company, we help enterprises and their entire supply chain ecosystem with our various products,” Kumar said. “Whether it is vendors and suppliers at the upstream of it or be it their dealers and distributors at the downstream of their supply chain, we have products for all.”

Solving Multiple Issues in B2B Transactions

One new offering is a buy now, play later (BNPL) solution for all kinds of B2B payments, online or offline. This helps sellers to get instant payment for the product at the point of sale (POS) and helps buyers to get immediate financing to purchase products on credit with a flexible repayment window.

“This will solve multiple issues in B2B transactions,” Kumar said. “While it gives instant access to funds for the sellers, it also gives the buyer enough time to sell to their end customers without worrying to pay for the purchase, thus solving their working capital requirements. On top of it, providing this at the point of sale means no dropout during the entire purchase process as the [companies] will get approved within one to two minutes.”

Credit card penetration among smaller businesses in India is “ridiculously low,” Kumar said, adding that banks offer cards to them only with a security deposit. Even if the business gets a credit card, the average credit period is 30 days while businesses may turn over their inventory only every 90 days.

“If given an option, the companies will want to buy products mostly on credit, as they can then first sell their product and then pay it back, else it creates a problem for them to scale fast as they need lots of capital to continue buying,” Kumar said.

Scaling up a Global Business

Another solution added by KredX is import-export financing that offers businesses transparent, easy and quick access to funds. While developing its capabilities in the domestic trade and supply chain ecosystem, the company found that many of its existing clients also engage in imports and exports.

“We have ventured into export-import financing as we see this business to be a logical extension of our existing domestic trade and supply chain business,” Kumar said. “We can leverage our existing distribution setup and geographic reach to rapidly scale up our global trade business.”

KredX also offers Capvel, a tool that digitizes and simplifies all financial processes end to end on a single platform in the cloud. It includes both accounts receivable (AR) management and accounts payable (AP) management.

In addition to offering these expanded services in India, KredX recently launched its services in the Middle East through its strategic partner LAMAA and plans to do so in all Gulf Cooperation Council (GCC) countries. It has also set up an office in Singapore.

“We aim to deliver exceptional trade finance opportunities to our clients operating in the major trade hubs and trade routes with the help of our soon-to-be-launched trade finance products,” Kumar said.