[Kevin Amolsch]

How can my business leverage fintech-enabled supply chain finance to optimize our working capital management? What are the potential benefits and risks that we should be aware of when considering this financing option for our MSME?

[Rahul Talwar]

Supply Chain Finance (SCF) is a type of short-term loan that helps businesses fulfill their working capital requirements. Fintech companies are disrupting the traditional methods of SCF by offering credit inclusion, reducing the time required, and providing more flexibility. This benefits startups with weak credit profiles and suppliers with longer lead times. Fintech companies integrate APIs into the ERP systems of clients in real-time to streamline financial operations.

Before Fintech emerged, managing financial operations in supply chains was a difficult and time-consuming process involving multiple banks and trade agreements between buyers and suppliers. The traditional method was manual and required a series of approvals. However, Fintech has digitized most transactions and reduced the costs involved.

Fintechs like Triterras are now helping micro and small-scale enterprises (MSMEs) to realize their full potential by enabling credit, data-based risk assessment, and credit inclusion. Triterras’ Kratos platform focuses on business development efforts in Supply Chain Finance by building the business financing segment representing large “”anchor buyers”” lenders. This ensures that the benefits of SCF are extended to smaller businesses.

[Fabian Tan]

Supply chain financing (SCF) is a great way for small and medium-sized businesses to bridge the gap between suppliers and manufacturers. With the help of technology-enabled SCF providers, transactions can be automated, and tracking payments and invoices becomes a seamless experience. SCF offers a short-term loan that optimizes working capital, providing liquidity to both parties. It allows buyers to have more time to pay their invoices, while suppliers can have quicker access to the funds they are owed.

SCF is important for MSMEs as it gives them instant access to working cash, which can help them meet urgent working capital demands and make early payments. This boosts liquidity and fosters greater communication between buyers and suppliers, leading to cost-effectiveness. Lending institutions provide cash based on the buyer’s creditworthiness, supply chain relationship, and buyer-seller vintage relationship. SCF can expedite cash flows for MSMEs, and sellers can be better positioned to contribute to the growth of the buyer’s firm. Overall, SCF is a valuable tool for businesses looking to optimize their working capital and grow their enterprises.

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