Technology is simplifying and reducing opaqueness in the forex market; a boon for MSMEs
With the emergence of online forex platforms in the last few years, the focus has been brought towards bringing transparency and simplifying forex transactions.
The MSME sector contributes around 48% to India’s total exports and almost 30% to the country’s GDP, however, the forex domain know-how is available to only less than 1% of the total MSMEs. This is an astonishing number given the magnitude of annual export and import numbers that are registered in India.
Despite being an important contributor to the growing forex business, MSMEs often get trapped between the complexities and jargons of the forex market that often gets too technical. Moreover, MSMEs do not have access to live forex rates and hence banks tend to take advantage and normally quote a higher or lower forex rate (0.5% to 1.5%) than the live currency rate. They tend to build-in currency fluctuations risk and combine few other charges like the bank commissions or forex transaction charges, service charges, etc. thereby making handsome profit on each forex transaction. In the year 2020-21 Indian banks made approximately Rs 60,000 crs from overall forex transactions. For MSMEs, these charges prove costly and are a direct hit on their bottom line. At Myforexeye, our aim is to serve organizations especially MSMEs by leveraging technology and simplifying forex thus reducing the opaqueness in over the counter (OTC) markets, says Anand Tandon, Founder and CEO, Myforexeye.
With the emergence of online forex platforms in the last few years, the focus has been brought towards bringing transparency and simplifying forex transactions. With technology at the forefront, fintech companies are able to provide real time access to all critical forex related data and information, thereby equipping MSMEs to efficiently manage forex transactions and save costs.
Fintech companies combine domain expertise and technology to offer simplified financial solutions in a transparent manner unlike traditional OTC players who operate with more human expertise and lesser of technology at the forefront of the client interaction. Having started its journey in 2014, Myforexeye is pioneer, tech-based forex company with an innovative mobile application, ‘Myforexeye app’. The app offers a bouquet of forex related services including providing access to live forex rates, market intelligence, expert advice and helping clients negotiate with large banks for better rates to name a few. The sole objective of the ‘Myforexeye app’ is to save money for clients and in turn bolster their bottom-line. Since inception, the company has serviced close to 4500 clients with transactions worth $ 9 billion and helped save $160 million for its clients.
The MSMEs continue to face a variety of challenges presented by the COVID-19 pandemic, such as steep hike in raw material prices, low production levels owing to the slow demand, logistical issues, shortage of manpower, difficulty in getting credit from banks and high interest costs on forex loans. As a company we are working closely with the MSMEs in mitigating and optimizing the interest costs coupled with our credit advisory services from in-house experts. Our digital services have facilitated in reaching out to MSMEs pan India thereby helping them improve their bottom line.
With the MSME sector getting encouraging support from government coupled with higher technology adoption will pave the way to the government’s aspiration of a 40% contribution from MSME sector to the country’s GDP. To align with this growth, we are slowly ramping our presence and opening new offices in various industrial hubs of the country. We will also be utilizing our domain expertise to demystify the highly technical and jargon-oriented trade. We are quite sure that with this intervention more MSMEs will come forward and look at digitization in a big way and pave the way for the growth of the company and the industry alike.
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