- Gujarat commands 33.3% of the overall exports during the period from April 2022 to February 2023
- 65% of exporters in Gujarat believe that lack of adequate finance hinders export growth: FIEO
- We will expand our operations to other States as well. Our target is to do $2 billion worth of transactions in the next 18 months: Anurag Jain, Founder and Executive Director, KredX
NE BUSINESS BUREAU
AHMEDABAD, JUNE 1
KredX GTX, a wholly owned subsidiary of supply chain finance platform KredX, on Wednesday announced it has recently became the first International Trade Financing Services (ITFS) platform in India to have received the final approval from International Financial Services Centres Authority (IFSCA) in GIFT City, Gandhinagar to facilitate global trade for Indian businesses.
Having completed the regulatory sandbox stage with transactions worth $2 million, KredX GTX is looking to execute export financing worth $200 million for its Gujarat-based clients this fiscal year. While another fintech players is in sandbox stage, two others were also granted ‘in principle’ nod by the IFSCA, to operate on the International Trade Financing Services platform (ITFS).
Speaking with navjeevanexpress.com, Anurag Jain, Founder and Executive Director, KredX, said, “We are the first fintech player to get an IFSCA licence to operate the KredX GTX platform. We plan to launch over USD 200 million in export financing in the state of Gujarat alone in this year through our ITFS (International Trade Finance Services) platform, KredX GTX. This strategic initiative aims to bolster the growth of businesses involved in international trade, ultimately driving economic development in the region. With its unrivaled expertise and extensive network, KredX is poised to empower exporters in Gujarat by providing them with the necessary financial resources to seize global opportunities.”
“Gujarat is the top exporting state in India and KredX GTX will propel the export numbers by facilitating pre- and post-shipment financing to exporters and help the Indian government to achieve its ambitious target of $2T in exports by 2030,” Jain said.
When asked about the company’s pan-India plans, Jain said, “We will expand our operations to other States as well. Our target is to do $2 billion worth of transactions in the next 18 months.”
In the face of the ongoing global economic slowdown that severely impacted exports across the country, Gujarat defied the prevailing trend. Despite challenges such as limited access to modern trade finance and working capital shortages, the state remarkably retained its leading position as the top exporter from India, commanding 33.3% of the overall exports during the period from April 2022 to February 2023. Following Gujarat, Maharashtra secured the second position with a share of 16.1%, while Tamil Nadu, Karnataka, and Uttar Pradesh held the third, fourth, and fifth spots with 8.9%, 6.1%, and 4.8% respectively.
65% of exporters in Gujarat believe lack of adequate finance hinders export growth: FIEO
However, as per the latest Export Preparedness Index prepared by the Niti Aayog while Gujarat clocked near perfect scores in export promotion policy, export infrastructure, business environment etc, it clocked a relatively low score of 53.92 as far as access to finance is concerned. According to a survey conducted by the Federation of Indian Export Organisations (FIEO), a staggering 65% of exporters in Gujarat believe that the lack of adequate finance has been a significant roadblock hindering their contribution to the country’s GDP.
Jain added, “Lack of finance has been a major roadblock for exporters in Gujarat, limiting their ability to contribute significantly to the country’s GDP. We are committed to addressing this gap by leveraging technology and financial innovation to provide swift and substantial funding to exporters, mitigating risk and empowering them to thrive in the global marketplace.”
Throwing light on the benefits of onboarding the GTX platform, Sachin Nigam, Director, Global Trade – KredX GTX, said, “Determined to address this critical gap, the KredX GTX platform amalgamates cutting-edge technology and financial innovation to empower exporters, enabling them to access swift and collateral free funding from prominent financiers with limited risk. KredX GTX will act as a conduit for international financial institutions to build an exposure to Indian supply chain finance assets which provide better average yield in the short term without setting up an origination arm in India. This will also boost the export ecosystem in India by facilitating billions of dollars in pre and post shipment working capital financing to our exporters and help in achieving an ambitious $2T export target by 2030 set by the government of India.”
Nigam further added that they have three-stage process for exporters. Firstly, an exporter – Indian or foreign – once registered on the KredX GTX platform, is verified based on the parameters set by the company. In stage two, after the invoice is uploaded, the financers make bids. In the third step, the exporter chooses the bid with the best rates of finance. The agreement is signed and the funds are disbursed.
The traditional post-shipment funding process is time-consuming and requires collaterals, with non-negotiable rates. On the other hand, the KredX GTX platform ensures transparent bidding for the invoices, bringing down the rates.
