Source: Economic Times
BENGALURU: Business-to-business supply chain financing startup Vayana Network claims to have emerged as the first fintech startup in the trade financing business to have crossed a $1 billion of loan disbursals on its platform catering to more than 250 corporate supply chains in the country.
In an interaction with ET, its founder Ramaswamy Iyer said that it took four years to achieve this milestone but was confident of doubling the figures within the next one year. The company has partnered with multiple banks and financial institutions to process these loans for enterprises.
“Initially building this technology enabled platform for small and micro enterprises was challenging, but now with e-way bill, goods and services tax (GST) and rapid digitisation of payments we should be able to scale up faster,” said Iyer. Explaining the business model Iyer said that Vayana Networks is attempting to solve financing requirements for small enterprises who are suppliers or vendors to large corporate entities or could be buying products from them. Iyer said that the platform has already processed more than 6.5 lakh invoices with 45% of the borrowers coming from smaller towns and cities. “We underwrite the corporate on the basis of the valid trade flows and how closely the company is integrated with the supply chain, this makes the underwriting process quicker for us,” said Iyer. With every supply chain the company fixes a lending partner and interest rates range between 9% and 13%.
Trade financing has emerged as one of the most attractive businesses in the lending space since financing happens in the trades between established corporates. After the Reserve Bank of India created TReDs a trade receivables platform for companies to get funding against invoices it was expected to become more formalised.