Vayana to launch ITFS platform in FY 22-23 - A breakthrough in cross border trade finance

The International Financial Services Centers Authority (IFSCA), established at GIFT City Ahmedabad, had floated guidelines to set up International Trade Finance Service (ITFS) platforms for facilitating Trade Finance between Exporters and Importers, through Financiers from anywhere across the globe, in a currency of their choice and at lowest possible rates discovered through a transparent, online auction mechanism.

The concept of the ITFS platform is one of its kind initiative and will have a far reaching impact on the Indian economy. It will result in ease of business and adding India to an exclusive club of global financial hubs.

Vayana Network has received the in-principle approval to set up International Trade Finance Service (ITFS) platform.

While large corporates have plethora of options and large teams of financiers working towards getting the best deals. It is the mid to small businesses which are unable to access favorable terms, often restricted to their existing banking relationships weighing growth opportunities against default risks.

The process and procedures involved in executing a cross-border transactions are cumbersome, the information asymmetry at the financier and insurer’s end leads to higher pricing to safeguard against risks.

It is here that ITFS will make a huge difference, the option of having access to multiple financiers will lead to each of them assessing the risk as per their internal policies, access to information and risk appetite, competition too will lead to an efficient price discovery. For e.g. ITFS will allow brassware exporter from Moradabad to access finance from an MNC bank without having to run pillar to post.

The platform will be a game changer for small business and how they access cross border trade finance. Nearly 50% of Indian exports are contributed by MSMEs and still they suffer from lack of options to secure credit on favourable terms. As per a 2019 report by Asian Development Bank (ADB), the rejection rates faced by the SMBs is high as 40%.

As the world overcomes the disruption caused by Covid, economies, businesses and individuals will need to show even more resilience in bringing life back to normal. Even in these times, there’s a learning. The virus has taught us the important lesson of evolving as a crucial factor of survival. As we head into the new financial year, lets rise to the challenge, embrace new and more efficient ways of doing cross border trade finance ensuring that business don’t lose growth opportunities for lack of finance.

Through the ITFS platform Vayana will create a hassle-free approach to undertake cross border trade transactions while retaining our ethos of easy, accessible and affordable finance to all size of businesses. If you would like to experience any of our supply chain finance solutions or be a part our new endeavours, fill in the form below or write to us at scf@vayana.com

See you at GIFT City in 2022.