Trade finance for SMEs: DBS Bank in collaboration with supply chain platform Infor Nexus on Friday announced the launch of a pre-shipment financing solution for SMEs part of the Infor Nexus supply chain ecosystem. The solution leverages historical data from the Infor Nexus platform to provide data-based lending for SME suppliers to meet their working capital requirements.
“While post-shipment financing solutions already exist in the market, pre-shipment financing is a game changer as it allows suppliers to use their enhanced cashflows to fulfil orders before goods are delivered to buyers,” a company statement said.
DBS Bank and Infor Nexus together so far offered early payments to the suppliers on a post-shipment basis. The bank will use alternative supply chain data, such as historical and real-time milestone information on the physical movement of goods from the Infor Nexus platform.
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Divyesh Dalal, MD and Head, Global Transaction Services, DBS Bank India said, “The innovative e2e working capital finance offering will not only address the manufacturer’s cashflow needs to produce goods (per PO) but also enable them to collect export proceeds in a timely and cost-effective manner through a trusted partner – Infor Nexus. The availability of Purchase Order finance fulfils a long unmet need of the SME/MSME manufacturer.”
The trade financing solution is extended to SMEs primarily in the apparel, footwear and textile industries, which are major growth sectors for the economy. As part of the Infor Nexus ecosystem, DBS Bank will underwrite the trade financing facility applications of prospective SME suppliers.
By accessing financing for pending orders, even before invoices are confirmed, SME suppliers can address their cashflow issues that occur between shipment, delivery and when the payment is received.
“This new offering demonstrates how data can transform supply chain finance. The pre-to-post shipment financing will enable Infor Nexus to provide a complete and integrated solution to improve supply chain efficiency and suppliers’ cash flow,” said Gary Schneider, VP Financial Services, Infor Nexus.
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DBS Bank has around 530 branches across over 350 locations, covering more than 100 SME hubs and more than 80 per cent of the addressable SME market in the country. Infor Nexus, on the other hand, connects a network of over 85,000 brands, retailers, manufacturers, suppliers, logistics providers and banks on single-instance network platform to orchestrate global supply chain processes from source through to delivery and payment.
According to market research firm, Research and Markets, India’s trade finance market was estimated to be $2.94 billion in 2023 and is expected to reach $4.15 billion by 2028, growing at a CAGR of 7.1 per cent