Vayana TradeXchange starts helping MSMEs in cross-border trade finance transactions

Among the four transactions involving Indian MSMEs, three are for exports to the U.S. and the other to the UK

February 10, 2023 10:10 pm | Updated 10:10 pm IST - MUMBAI

Vayana TradeXchange (VTX), an international trade finance services (ITFS) platform, having secured licence from International Financial Services Centres Authority (IFSCA) to operate on the Gift City-based platform, has executed four cross-border trade finance transactions for MSMEs worth $71,000 in a month, it’s CEO said.  The platform is now eyeing $200 million worth of transactions in a year.

VTX, built and operated by Vayana (IFSC) Pvt. Ltd., a 100% subsidiary of supply chain finance platform Vayana Network, is among four Indian entities to secure licences from IFSCA to operate ITFS platform.

Among the four transactions involving Indian MSMEs, three are for exports to the U.S. and the other to the UK.  VTX, the auction-based electronic platform, enables sellers (exporters) and buyers (importers) across the globe to avail of various types of trade finance products which helps them address their trade receivables and payables resulting in better management of cash flows. 

“Through this platform, exporters and importers will gain timely access to trade finance seamlessly across geographies, opening avenues to new business opportunities. The rates are discovered through a transparent bidding mechanism, with funds available in the currency of trade,” Kalyan Basu, MD & CEO, Vayana TradeXchange said.

Mr. Basu was talking on the sidelines of Vayana TradeXchange roadshow, conducted in association with IFSCA, the unified regulator at Gujarat International Finance Tec-City - International Financial Services Centre (GIFT-IFSC). 

“So far, we have done four transactions involving MSMEs for exports. Not much to boast about right now, but we have started our journey. This is a completely new concept where the entire price discovery of discounting will be through a bidding mechanism,” he said.

“Another uniqueness of the platform is that it is not constrained by geography or the sector or by which kind of customer it is. MSME, non-MSME, large, small, big whosoever is there can come in on this platform,” he added.

Vayana is planning to offer differentiated products for exporters and importers. In the first phase, it will be doing India-centric transactions which means, for export transactions exporters will be in India, and for the import transactions importer will be in India.  This phase will be run for six to seven months to ensure that the platform processes are right, everything is working fine and there are enough transactions to take it outside, Mr. Basu explained.

Mr. Basu said the company would then expand in other Asian countries like Vietnam, Indonesia, Malaysia and others and then the Middle East among others. 

Although the company has executed transactions worth $71,000 in its first month of operations, it expects to close the first year with a total transaction value of close to $200 million, Mr. Basu added.

“This is a new business. We do expect it to grow really very fast once the processes are accepted by the participants and it also depends on various other factors like how many foreign factors can we bring in, and how fast the Indian factors can tie up with insurance companies for a derisking transaction,” he added.

VTX has so far onboarded State Bank of India, Yes Bank, India Factoring, VoloFin and Drip Capital as financiers and is envisaging to onboard another 10 financiers soon.

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