India’s M1NXT Wants To Grow Its Trade Finance Offerings

Indian trade financing company M1NXT is testing the country’s International Trade Financing Services (ITFS) platform.

Sunday, the website Financial Express said that small businesses that export their goods could get early payments at lower interest rates if they use ITFS (Jan. 22).

CEO Jacob Raphael said M1NXT is partnering with as many national and international institutions as possible to provide Indian exporters with liquidity.

Trade financing is a trillion-dollar business, but India’s participation is $6 billion, according to Financial Express.

The company’s initiatives coincide with trade finance’s digitization and streamlining. Risk assessment and underwriting used to take days or weeks, especially for first-time credit applications.

But as banks and their partners have added more digital tools. Many trade financing loans are now authorized and paid the same day.

This has led to new ways to borrow money, such as Santander’s BNPL service for multinational corporations.

Allianz Trade and Oslo-based BNPL FinTech Two made the solution. It will allow companies to offer their business clients a BNPL option similar to what consumers have. API-backed automatic credit assessment technologies and a database with financial data on 80 million enterprises will make approval nearly immediate.

When it comes to trade finance, on the other hand, SMBs could be at a disadvantage.

There are only a few big players in the credit markets. The International Chamber of Commerce says that 13 banks provide 90% of trade financing.

The World Trade Organization says that SMBs turn down more than half of their trade finance requests. This is much higher than the 7% rejection rate for multinational corporations.

At least part of the gap can be filled by data. It helps FinTechs to make it easier for SMBs to get the credit and cash they need to do business.