Big boost for SMEs! FIEO, Drip Capital to power Indian small business exports
In a bid to provide exporters with training in technology and invoice factoring, Drip Capital has signed an MoU with FIEO to boost SME exports.
FIEO, Drip Capital MoU: In a bid to provide exporters with training in technology and invoice factoring, 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 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 SME exporters of Indian to understand the available opportunities in a better way.
The memorandum was signed by Khalid M Khan, Regional Chairman, FIEO (WR) and Pushkar Mukewar, Co-Founder and Co-CEO, Drip Capital. Speaking about the partnership, Khalid M 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.”
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Pointing towards the benefits of this MoU Pushkar Mukewar, Co-Founder and Co-CEO, Drip Capital said, “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.” He said that the existing paper-based trade finance system is inefficient and biased against smaller exporters. These exporters spend the 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. He went on to added that 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.
Batting for the boost to SME experts Dr. Ajay Sahai, Director General & CEO, FIEO said, “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. Growth in exports will mean a stronger economy, and this segment has the potential to create more jobs in India.” He said that 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. 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.