Credit and Finance for MSMEs: New Delhi-based B2B market CommerceIndia ventures into MSME loans with the launch of CommerceIndia Lending, a digital lending answer for small companies.
On the rationale behind the launch, Sandip Chettri, CEO, CommerceIndia instructed Financial Express Online, “Last year in June, post the second wave of the Covid pandemic, we did a survey of 50,000 SMEs and found 83 per cent of the respondents confirming their inability to raise timely credit. This made us introspect if we could be a one-stop solution for the SMEs, where we go beyond providing access to a marketplace by also supporting them in raising funds to meet their next big order.”
MSMEs in India face the colossal credit score hole of Rs 20-25 lakh crore and among the key causes behind the shortage of entry to capital is the absence of collateral, incomplete books of accounts, choice for money transactions and lack of credit score historical past.
“Given we have the transaction history of buyers and sellers on our platform, we can act as guarantors for them,” stated Chettri. CommerceIndia didn’t disclose the names of any lending companion however stated they’re at the moment in talks with a number of NBFCs and banks.
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The B2B e-commerce platform would do the preliminary screening of the MSMEs’ eligibility for the mortgage based mostly on their transaction historical past, enterprise turnover, its CIBIL rating and steadiness sheet. It would additionally cost a processing payment for the mortgage screening and in addition part of the curiosity from the debtor. “There will be intangible benefits too as MSMEs will find more value on TradeIndia and their stickiness towards our portal will increase,” stated Chettri.
TI Lending will begin with three merchandise in the course of the first 12 months: working capital mortgage, provide chain financing mortgage and a subscription-based providing for MSMEs who go for CommerceIndia’s merchandise for digital transformation. The mortgage worth for all these merchandise can go as much as Rs 25 lakhs with the rate of interest ranging from 16 per cent. “We suspect most of the small businesses applying for these products would be from tier 2 and tier 3 markets as MSMEs in metros usually seek higher value loans,” added Chettri.
A pilot was executed to check the waters and CommerceIndia acquired a complete of two,000-plus purposes in the course of the first 10 days for which they dispersed an quantity of Rs 55 lakhs. The variety of MSMEs Rs 55 lakhs was given to was not shared.
On development plans, Chettri stated, the intention is to disburse Rs 100 crore to over one lakh MSMES by March 2023.
Source: www.financialexpress.com”