New Delhi, Jul 1 (KNN) In a move set to transform the landscape of trade finance for India's Micro, Small, and Medium Enterprises (MSMEs), DBS Bank India has announced a strategic partnership with Receivables Exchange of India Limited (RXIL).

This collaboration aims to introduce an innovative pre-shipment financing solution on the Trade Receivables electronic Discounting System (TReDS) platform, marking a significant step forward in empowering Indian SMEs with enhanced access to credit.

The new offering builds upon DBS Bank India's existing post-shipment financing services on the TReDS platform, creating a comprehensive financial ecosystem for SMEs.

By leveraging alternative trade lending data from RXIL, DBS Bank India will now be able to construct more accurate borrower profiles, enabling support for the entire trade cycle of suppliers - from raw material procurement to final product delivery.

This development is particularly crucial for MSMEs across India, which, despite contributing a substantial 45.56 per cent to total exports from April to September 2023, often grapple with challenges in securing favourable payment terms and credit from buyers.

The pre-shipment financing solution promises to alleviate these pain points by providing a transparent and simplified process for obtaining funding against purchase orders.

Divyesh Dalal, Managing Director & Head of Global Transaction Services, SME & Institutional Liability Business at DBS Bank India, emphasised the significance of this partnership. "Our collaboration with RXIL underscores our commitment to supporting the MSME sector and broadening their access to finance," Dalal stated. He highlighted the efficiency gains, noting that the new structure would "significantly reduce the time required for credit decisioning and linked documentation."

Ketan Gaikwad, Managing Director & CEO of RXIL, echoed this sentiment, describing the partnership as having "immense potential in revolutionising pre-shipment financing for MSMEs." Gaikwad outlined a vision of leveraging data-driven approaches to assist MSMEs in streamlining operations and enhancing liquidity, ultimately facilitating their growth in the trade sector.

The partnership between DBS Bank India and RXIL represents a significant step forward in addressing the working capital challenges faced by MSMEs.

(KNN Bureau)