Amazon-Backed M1 Exchange to Launch Facility for MSME Exporters at GIFT City
M1 Exchange, a platform dedicated to trade receivables and bill discounting for MSMEs, which is backed by Amazon, is set to establish a facility for MSME exporters at the Gujarat International Finance Tec-City (GIFT City). The platform has already obtained a license from the International Financial Services Centre Authority (IFSCA) of GIFT City. Inย additionย to 3 other platforms, M1 Exchange intendsย to tap into the $17 trillion probable of supply chain finance in worldwide trade. The GIFT City facility will operate through a wholly-owned subsidiary.
Enabling Financing for SME Exports
Sundeep Mohindru, CEO of MYND Solutions Private Ltd, the promoter of M1 Exchange, stated that they will replicate their financing services for SMEs in India toย support exports by factoring invoices. Mohindru added that invoice discounting for Indian SMEs will be made possible using international banks or banks based in GIFT City. The discount rate for Indian SMEs will depend on the creditworthiness of the customer outside India rather than the financials of the exporting SME, resulting in cost savings of 3-4% for Indian SMEs.
Upcoming Facility and Investor Support
The sandbox testing phase is asย ofย now underway, and the facility is expected to go live for customers within 3 months. Alongย with Amazonโs 10% stake in M1 Exchange, other investors include deal funds such as Sidbi Deal Financialย resources Funds, BeeNext, Mayfield, and B2B platform Indiamart. Furthermore, Indian-licensed trade-financing platforms that utilize blockchain technology may likewise be explored for use in GIFT City ventures.
Hot Take: Boosting MSME Exports with Trade Financing
M1 Exchange, with the support of Amazon and other investors, is expanding its services toย support MSME exports. By establishing a facility at GIFT City, the platform intendsย to enable financing for MSME exporters by factoring invoices through international banks or banks based in GIFT City. This move is expected to result in cost savings for Indian SMEs and tap into the wholeย lotย of probable of supply chain finance in worldwide trade. With the sandbox testing phase underway, the facility will be available to customers in 3 months, further bolstering Indiaโs MSME sector.
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