The availability of supply chain financing goes well with medium and small enterprises in India. It constitutes 45% of the total industrial production. It also holds a place in 40% of the full export and import in India.
Most of the small scale business has been acting as active beneficiaries of the supply chain finance. It allowed tremendous growth for every small-scale business. The reason behind this is the easy approval of quick credits within the timeline of 2 days to 3 days. It enables the firm to indulge in purchases. In return, it helps to accelerate the growth rate of small businesses.
Moreover, working capital loans became easy to access for every small-scale industry and business firm. Most of the non-banking financial institutions and financial banking institutions offer the accessibility of affordable loan products. The loan amount gets credited to the designated bank account within the next working day. It is possible due to the presence of an electronic payment mode.
When the financier tends to make any repayment, the amount gets repaid to the financer. However, as per the Reserve Bank of India, only the medium and small enterprises can participate in this process while every other factoring company, financial institution, or non-banking financial company can act as the financier.
Supply chain financing emerges as a new opportunity for fintech companies and banks. In today’s eon, the situation is dominated by financial institutions. Besides, there are these specialist financial technology companies who changed to provide software-based services and platforms to support every operation of supply chain financing. Supply chain finance in India is a big business. One must know the basics of the supply chain to try out various new supply chain financing options.