Logistics for MSME: Supply chain finance plays a critical role in the growth of small businesses for its ability to cater to the immediate credit requirements of MSMEs and mitigate the growth risk amid a lack of working capital. The rise of the Reserve Bank of India’s (RBI) TReDS platform and changes made in the Factoring Regulation Act, 2011, which made eligible as many as 9,000 NBFCs to participate in the factoring market, is expected to boost the growth momentum of the supply chain finance for small businesses in the country.
Also read: Insurance companies can now participate in TReDS: RBI
According to supply chain finance company KredX’s founder and CEO Manish Kumar, TReDS has brought the power of financing to MSMEs instead of banks earlier. “MSMEs don’t have to go to the bank instead it is the other way around. This is the major shift that has happened in the supply chain finance,” he told FE Aspire at the recently held ScaleUp Summit organised by the Financial Express.
Kumar talks more about what MSMEs should look at before seeking supply chain finance, the right time or situation to raise supply chain finance, its impact on rural MSMEs, etc.
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