Drip aims to develop a global platform to simplify trade for SMEs by leveraging data and technology
Mumbai, 11th July 2019: Drip Capital, a US based fintech company, has signed a memorandum of understanding (MoU) with the Federation of Indian Export Organisations (FIEO), the apex body for export promotion set up in partnership with the government of India.
The two organisations will partner to provide exporters with training in technology and invoice factoring. The partnership will give small-and medium-sized exporters exposure to fintech solutions, widely considered to be one of the biggest disruptors in cross-border trade. Small exporters, who are often overlooked by banks or are otherwise unable to access the traditional banking system, can leverage these solutions to their benefit. The Drip-FIEO partnership aims to help exporters understand these opportunities better.
The existing paper-based trade finance system is inefficient and biased against smaller exporters. These exporters spend time they cannot afford in battling bureaucracy and slow processing times, as well as demands for collateral. This is what Drip Capital aims to fix, with its focus on collateral-free, technology enabled finance. “Our idea is to create an automated platform that would address the working capital needs of SMEs, not just in India, but across the world. What we want is to level the playing field for SMEs everywhere and give them easy access to trade finance,” said Mr. Pushkar Mukewar, Co-Founder and Co-CEO, Drip Capital.
Helping SME exporters with trade finance also feeds into a larger goal of giving the country’s overall economy and GDP growth a boost. Multilateral agencies like the World Bank have found that economies gain immensely when trade increases, especially in the MSME sector.
Trade-related challenges cannot be tackled by private companies alone. FIEO is a trade promotion body backed by the government of India, and can reach the widest network of exporters in the country. “In India, MSMEs contribute to about 50% of the total exports (merchandise as well as services). It is vital that this segment is given a boost. A growth in exports will mean a stronger economy, and this segment has the potential to create more jobs in India,” said Dr. Ajay Sahai, Director General & CEO, FIEO.
Under the provisions of the memorandum, FIEO, in partnership with Drip Capital, will conduct a series of awareness raising events among MSME exporters across the country.
The memorandum between Drip and FIEO will also result in the creation of an online platform that will help exporters free up their working capital (locked in export receivables) by discounting them. Through this platform, Drip Capital will underwrite and set up post-shipment credit facility for exporters in a transparent and hassle-free manner.
The memorandum was signed by Mr. Khalid M Khan, Regional Chairman, FIEO (WR) and Mr. PushkarMukewar, Co-Founder and Co-CEO, Drip Capital. Speaking about the partnership, Mr. Khan said: “Technology is an important element of trade finance, as it can reduce the need for red-tape and paperwork. This will help exporters access credit easily, leading to an improvement in export numbers. The memorandum with Drip Capital will allow us to put exporters in touch with financial technology.”
Mr. Raghav Khajuria, Head of Marketing, Drip Capital, who led this partnership, added that this memorandum would benefit all stakeholders. “FIEO members will get access to Drip Capital’s technology driven, SME-focused offerings, while Drip Capital will be able to tap a wider network of MSME exporters,” he said.
Drip Capital has financed over $500 million of international trade originating from India so far, helping exporters in 60+ cities across the country ship products to buyers in more than 50 countries around the world. The partnership with FIEO will help Drip reach out to even more SME exporters in need of working capital and help them create economic development and growth across their businesses.
About Drip Capital: Drip Capital is a US-based trade finance company, providing collateral-free post-shipment finance to SME exporters with instant approvals and minimal documentation. The company was founded by PushkarMukewar and Neil Kothari with a philosophy to solve the working capital gap for SME exporters across emerging markets with the help of technology-powered finance solutions.
About FIEO: Set up in 1965, FIEO is the apex body of export promotion councils, commodity boards, and export development authorities in India. FIEO was set up jointly by the Ministry of Commerce, Government of India, and private trade and industry.
FIEO is recognized as an Export Promotion Council for the purpose of issuing Registration-cum-Membership Certificate (RCMC). An exporter is required to get RCMC for availing various benefits under the Foreign Trade Policy. By FIEO Registration, an exporter has the double advantage of getting the benefits under the Foreign tars_scriptde Policy, as well as the benefit of FIEO’s services.
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