Credit and finance for MSMEs: Digital trade finance companies Drip Capital and Vayana TradeXchange on Wednesday announced their partnership to provide export finance solutions to SMEs. Drip Capital said the partnership will allow it to leverage Vayana’s ITFS (International Trade Finance Services) platform to provide financing solutions to SMEs by converting their trade receivables into cash and easing working capital for them.
Pushkar Mukewar, CEO & Co-Founder of Drip Capital, said pooling resources together for such digital innovations in cross-border trade will further help Indian MSMEs grow and, in turn, contribute significantly to the economy and become globally competitive.
Vayana TradeXchange, which operates under the supervision of the International Financial Services Centre Authority (IFSCA), is an auction-based electronic platform that facilitates cross-border trade financing for SMEs. The platform enables financiers, exporters, and importers to connect with and discover each other easily, irrespective of their size or location.
“It has immense potential in terms of capability, innovation, and reach to be the go-to platform for digitised cross-border trade finance in the days to come,” said Kalyan Basu, MD & CEO, Vayana TradeXchange.
The company is a wholly-owned subsidiary of the trade finance platform Vayana Network which has processed over 3 million transactions so far. It is also a GST Suvidha Provider facilitating GST, e-Way bill, and e-invoicing for corporates and SMEs. On the other hand, Drip Capital offers post-shipment export financing solutions, bridging the working capital gap among small businesses. It works with over 6,000 sellers and buyers across over 100 countries and is backed by investors including Accel Partners, Sequoia Capital, Wing VC, TI Platform, and Y Combinator.
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For the uninitiated, the Reserve Bank of India (RBI) currently operates the trade finance platform TReDS for MSMEs and other businesses through four licensed entities – Receivables Exchange of India Ltd (RXIL), M1Xchange, Invoicemart and C2FO. According to the government data, the value of transactions undertaken on TReDS platforms in FY22 had doubled to Rs 34,362 crore from Rs 17,080 crore amid Covid in FY21, and more than tripled from Rs 11,165 crore during pre-Covid FY20.