Veefin Solutions achieves $12 bn in annual supply chain financing disbursements, reports papid growth
Veefin Solutions, the supply chain finance company’s technology provider, has doubled payments through its suite of products since January 2022 and crossed $12 billion in annual payments globally in February.
Monthly supply chain financing through the platform reached $1.3 billion in February.
SCF is a financing method that focuses on improving cash flow within the supply chain. It is designed to provide financing solutions for the entire supply chain, from the primary borrower to suppliers and merchants.
In SCF, lenders provide liquidity against invoices from suppliers and merchants, based on the creditworthiness of the parties involved to manage risk.
The goal of the SCF is to improve the financial stability of the supply chain by providing faster access to financing and improving cash flow. The process typically involves collaboration between parties within the supply chain to streamline the approval process, and SCF solutions are often customized to meet the specific needs of the parties involved.
Raja Debnath, Managing Director and Co-Founder of Veefin Solutions, said supply chain financing offers short-term loans compared to other SME loans and mitigate money transfer risks as the end user is closely monitored.
These loans also include early warning incentives that prevent withdrawals at startup and are very profitable for lenders.
If a merchant or supplier continues to cooperate with a large corporate entity, demand for loans or early payments continues, and purchase costs can be offset over time. He added that this contrasts with other SME loans where companies may not require fixed funds, which leads to higher acquisition costs.
SCF effectively addresses the credit gap of MSMEs. Venture capital and private equity firms have also recognized the potential and have invested in SCF fintech/techfin companies. Stack and digitization initiatives in India have also played a significant role in the growth of SCF. Debnath said that with continuous innovation from fintech and technology players, the SCF market is expected to grow at a rate of around 100 percent annually over the next five years.
“We are working to unlock the full potential of SCF and promote a more inclusive and sustainable future for small and medium-sized enterprises around the world,” he said.