DBS Bank India has partnered with Receivables Exchange of India Limited (RXIL), a TREDS platform, to offer pre-shipment financing solutions.

While the foreign bank already offers post-shipment financing on the TREDS platform, it is now launching a pre-shipment financing solution that will empower Indian SMEs with an additional way to access trade finance in a credit-light manner.

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With the new DBS solution, MSMEs will now be empowered through a transparent, simplified process on the Trade Receivables e-Discounting System (TReDS) platform to obtain funding against purchase orders from buyers. In this way, the cash flow can be smoothed.

By using RXIL’s alternative trade credit data to build better borrower profiles, the bank will be able to support the supplier’s entire business cycle, from procurement of raw materials to delivery of the final product to the customer.

This offering will be particularly relevant to MSMEs and SMEs across India, enabling buyers to leverage cash flow to fulfill orders even before goods are shipped.

MSMEs contributed 45.56 percent to total exports from April to September 23, according to a report by the Ministry of External Affairs. Despite their significant share in trade flows, MSMEs often face challenges in establishing favorable payment and credit terms with buyers, managing disbursements, and obtaining required documentation from formal lenders.

Devesh Dalal, Managing Director and Head – Global Transaction Services, SME and Corporate Responsibility Business, DBS Bank India, said, “Collaboration with RXIL is a great way to support the MSME sector and expand their access to finance. clarifies our commitment to

This structure enables us to significantly reduce the time required for credit decisions and associated documentation, which will greatly benefit time-strapped business owners.

DBS Bank India will be the first bank to partner with RXIL to offer end-to-end supplier financing using platform data to perform credit assessment and approval thresholds. “The partnership leverages our digital capabilities to facilitate working capital financing for MSME suppliers and help them unlock value in their operating flows,” Dalal added.

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RXIL Managing Director and CEO Ketan Gaikwad said, “RXIL is at the forefront of transforming the trade finance landscape. This collaboration with a trusted partner like DBS Bank India will revolutionize pre-shipment financing for MSMEs.” Has immense potential.

Our shared vision includes leveraging a data-driven approach to help MSMEs streamline operations, increase liquidity, and expand their businesses, as well as simplify their business journey.”

Additionally, this collaboration promises to address the working capital challenges faced by MSMEs, offering tailored solutions to enhance their financial stability and accelerate their growth.

“By leveraging innovative financing mechanisms, we aim to empower MSMEs with the resources they need to thrive in today’s dynamic business landscape,” added Gaekwad.

What is TREDS?

TReDS is an electronic platform that facilitates financing/discounting of trade receivables of micro, small and medium enterprises through multiple financiers.

These receivables may be from corporates and other buyers, including government departments and public sector entities.

A major advantage of TReDS is that MSMEs are not required to provide collateral and have no recourse in case of default. It may be noted that the first transaction on TReDS in India took place on January 9, 2017 and this transaction was conducted by RXIL.

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