Published : May 6, 2021, Updated : November 9, 2023

Supply Chain Finance Automation Fast-Tracks MSME Payments

Supply Chain Finance Automation Fast-Tracks MSME Payments

Did you know only six crore MSMEs in India account for 29 per cent of the Gross Domestic Product (GDP) and 11 crore jobs, albeit with less than two per cent automation of supply chain financing? What does it take to keep the manufacturing supply chain moving so that 1.3 billion Indians continue to receive the goods that they need just in time? What is the oxygen that repeatedly fuels manufacturing to ensure that goods continue to flow through the supply chain?

The just-in-time (JIT) supply chain model runs on JIT payments and virtually automates agility, innovation, and efficiency in manufacturing.

Why are MSME suppliers yet to benefit from supply chain finance automation?

MSMEs in India have an offline legacy and have been historically underserved by technology. Supply chain financing automation in emerging economies, including India, is in stages of infancy. Any technology solution must first prove to MSMEs what is wrong with offline credit platforms and processes before enrolling them into a digital working capital ecosystem.

  • Lack of digital identity of MSMEs and low levels of automation in transactions
  • Digital divide and economic distancing of MSME suppliers from buyers 
  • Offline processes create asymmetries of information between enterprise buyers and suppliers
  • Offline supply chain collaboration slows down innovation and payments
  • Offline credit underwriting makes credit infusion risk-prone, slower and costlier

MSME finance automation, a need to establish an all-weather supply chain & make India atma nirbhar.

At the heart of our efforts to make an Aatma Nirbhar Bharat for 1.3 billion Indians is the need to secure the pipelines connecting enterprise buyers to MSME suppliers. For every B2C transaction, there are five to seven transactions in the B2B supply chain that involve enterprise buyers and MSME suppliers that make in India.

The B2B supply chain and its finance in India are far too big and far too important to be at the mercy of offline processes and platforms of MSME credit. MSME financing automation is a need to have, and the time is now.

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