Four big banks join Invoicemart TReDS platform

Prominent banks Allahabad Bank, Standard Chartered Bank, Vijaya Bank and Yes Bank, have come on-board the invoice discounting platform Invoicemart. These recent addition takes the total number of financiers on the platform to 10.

Invoicemart, a TReDS (trade receivable discounting system) platform is a digital invoice discounting marketplace promoted by A. TREDS Ltd, a joint venture between Axis Bank Ltd and B2B e-commerce company mjunction services ltd. It is a platform which connects MSME suppliers (sellers) and their corporate buyers to multiple financiers.

The platform allows MSME suppliers to avail finance quickly and at competitive interest rates which in turn helps increase their working capital efficiency without impacting their relationship with buyers.

This platform enables discounting of invoices of the MSME sellers raised on large buyers, through a transparent bidding mechanism that ensures financing of receivables at competitive market rates.

Bank of Baroda had become the first public sector bank to come on board in January this year. The other financiers / lenders are foreign and private banks. Invoicemart is in talks with other public sector banks to join the platform.

Invoicemart has been witnessing an increased interest by financiers as they warm up to the idea of online invoice discounting. The banks are also gearing up their internal processes by setting up specialised departments and branches.

Speaking on these partnerships, Kalyan Basu, CEO & MD, Invoicemart said, ''We welcome these prestigious financial intuitions on board and thank them for showing trust in our offering; we assure superior service levels to our new partners. Invoicemart team has in-depth knowledge of supply chain finance, corporate and SME banking. The team understands the challenges faced by MSMEs in obtaining working capital finance and the systemic gaps in the financial ecosystem. At Invoicemart our endeavour is to bridge the gap that has prevented institutional lenders from reaching out to small businesses.''

According to BCG-FICCI 2017 report, less than 10 per cent of the 50 million strong MSMEs borrow form formal financial institutions, if targeted and serviced appropriately, MSMES can grow to have substantial share of Indian bank's commercial balance sheets in the next three - four years.

Factoring platforms such as Invoicemart enable financiers to extend loans to MSMEs based on the ratings of their corporate buyers, which usually have good borrowing ratings. This allows MSMEs to get capital at lower costs while financiers are not only assured of repayment but also get PSL accreditation for such loans.

Basu added, ''The recent announcements by the finance minister for resolving various issues of MSMEs has been a shot in the arm for them, resulting in a renewed interest by financial institutions in funding their working capital needs."