By providing substantial financial assistance, financial firms, including both conventional banks and non-bank organizations, aid in identifying supply chain vulnerabilities and risks.
Traditional financial institutions offer loans to MSMEs; however, these loans are typically susceptible to high default rates or are underutilized due to collateral restrictions.
Non-bank institutions and fintech companies offer alternative financing mechanisms, like supply chain funding sources, which utilize transactional information (e.g., proof of contracts or purchase orders) in favour of collateral to assist MSMEs in securing financing for supply chain operations.