Veefin Solutions achieves $12 billion in annual supply chain finance payouts

Veefin Solutions, the technology provider for the supply chain finance company, has more than doubled payouts across its product suite since January 2022, surpassing the $12 billion annual payout mark globally in February.

Monthly supply chain funding through the platform had reached $1.3 billion in February.

SCF is a financing method focused on optimizing cash flow within a supply chain. It is designed to provide financing solutions for the entire supply chain, from the prime borrower to its suppliers and distributors.

At SCF, lenders provide liquidity against invoices from suppliers and dealers based on the creditworthiness of the parties involved in risk management.

SCF’s goal is to improve the financial stability of the supply chain through faster access to finance and cash flow optimization. The process typically involves collaboration between parties within the supply chain to streamline the approval process. SCF solutions are often customized to the specific needs of the parties involved.

Raja Debnath, managing director and co-founder of Veefin Solutions said that supply chain finance offers shorter terms compared to other SME loans and reduces the risk of fund diversion because the end user is closely monitored.

These loans also have early warning triggers that, when triggered, prevent a drawdown and are extremely profitable for lenders.

If a dealer or supplier continues to work with a large company, the demand for credit or prepayment remains and the acquisition costs can be amortized over time. This is in contrast to other SME loans, where companies may not need constant funds, resulting in higher initial costs, he added.

SCF effectively closes the credit gap for MSMEs. Venture capital and private equity firms have also recognized the potential and invested in SCF fintech/techfin companies. The India Stack and the digitization initiatives have also contributed significantly to the growth of SCF. Thanks to continued innovation from fintech and technology companies, the SCF market is expected to grow at about 100 percent annually over the next five years, Debnath said.

“We are working to realize the full potential of SCF and foster a more inclusive and sustainable future for small and medium-sized businesses worldwide,” he said.

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