The COVID-19 pandemic caused chaos on the supply chain ecosystem, wreaking havoc on micro, small, and medium-sized enterprises (MSMEs) and leaving them struggling to survive and build capital.
Moglix, a Noida-based business-to-business (B2B) industrial goods ecommerce marketplace, saw the need for a financing platform at this time and launched Credlix. It is a digital supply chain financing platform that provides immediate collateral-free working capital solutions to the entire supply chain.
“Unless MSMEs got paid, how would they produce goods to supply? Dwelling on this, we reached the point of realisation that working capital is something which can only accelerate our journey to become the B2B operating system,” says Pramit Joshi, Director, Credlix.
Moglix will launch its platform in February 2021. It is a distinct division of the company that offers quick collateral-free working capital services to enterprises and exporters.
“Given the specifics that a financing business calls for, it was best to have it as a separate division, which leverages on the synergies that Moglix internally has as well as goes out independently and builds its own financing infrastructure to meet the unmet demand,” Pramit says.
Unlike publicly traded companies, MSMEs do not provide quarterly financial updates; instead, they provide these details semi-annually or annually, which does not help them with creditworthiness.
Moglix, on the other hand, already has an end-to-end supply chain platform that brings together 700 enterprises and 16,000 small and medium enterprises based primarily in India and Southeast Asia.
Credlix reaches out to MSMEs in order to bridge the funding gap. Suppliers can request early payments from enterprise buyers at reasonable discount rates in order to keep their supply chain operational and in control of their cash conversion cycle.
On a single platform, vendors and suppliers can do everything from credit application and credit risk assessment to payment approval and final disbursement.
The flow-based financing model offers services such as early payments and invoice discounting, and it is based on almost daily updates on what MSMEs are buying and selling, as well as monthly updates on GST data points.
According to the company, it has already surpassed the annual run rate of credit disbursement of $100 million in November of this year, and has financed 26,000+ invoices for 2,500+ MSMEs across 120 cities.
