FinessArt – Credit Disrupted
The nature of supply chain network of any organization depends on various factors, including the geography they operate, procurement models, distribution channels etc. This makes it important for an organization to adapt to strategic steps with local fit to improve their supply chain effectiveness and efficiency. It is is especially true for India, with huge number of Small and Medium enterprises (SMEs) helping the corporate to cover a vast geography for sourcing and distribution. This scenario also comes with a set of challenges.
There are about 50 million small, and medium-size enterprises (SMEs) operating in India today. Though SMEs act as a leading contributor in terms of nation’s employment and gross domestic product (GDP) , lack of access to process driven systems and formal banking creates a significant barrier for the collective growth. The unorganized character of these entities makes supply chain financing one of the least penetrated by the banking system in India.
The major challenges identified by the businesses are,
- Gaining access for affordable credit
- Attracting and Retaining customers
- Lack of transparency across supply chain
The right technology and right partnerships can always attain desired results. Our FinessArt experience effectively addressed all major growth barriers in the extended supply chain. Arteria has partnered with SAP and A Major Bank Group in India for building a platform helps to connect “Corporate– SMEs and Banks” under one ecosystem. Through Arteria’s FinessArt platform we aim to connect the unconnected supply chain entities and empower them to access formal supply chain credit. For the bankers, this opened a way to reach out to a new set of customers who majorly belong to Small and Medium Scale enterprises.
“There are about 50 million small, and medium-size enterprises (SMEs) operating in India today. Though SMEs act as a leading contributor in terms of nation’s employment and gross domestic product (GDP) , lack of access to formal credit creates a significant barrier to their growth. Roughly 40 percentage of India’s SME lending is done through the informal sector , where interest rates are at least twice as high as the formal banking market. Bank understands that a digitally enabled technology platform to connect Corporate and Small and Medium scale entities will completely transform the SME business equations with respect to banking in India. I am sure our partnership with Arteria Technologies and SAP has the power to take business to a completely new level.”
National Head , Digital Partnerships
One of India’s largest Banking Group
The FinessArt platform is built on SAP cloud with inbuilt integration to Corporate’s SAP ECC/S4H environments. It is an easy to deploy SaaS solution effectively helping the Corporate to leverage their existing investments and extending the digital processes to SMEs in their networks. Bank systems are also integrated with the platform on SAP Cloud, helping the bank to check the credit worthiness of a customer, assign a pre-approved credit limit and even processing the lendings and payments through a digital process. The technical triggers are designed in such a way that, once the payment or financing is processed through the platform it automatically updates all integrated systems.
The six month results from market are evident that the program will transform the Corporate – SME – Bank relations in the country to a new level. Already a significant number of corporate as well as SMEs is benefited through the platform,
- Nearly 20 million USD ( INR 140 Crore ) is already disbursed through the platform to SMEs.
- Supply chain lending timelines are reduced from more than 2 weeks to merely 30 Minutes.
- 10-15% reduced interest cost for SMEs – by replacing informal financing options with digital channel financing.
- Increased visibility across the supply chain network
The platform addresses the major challenges faced by Small and Medium Scale Industries in the extended supply chain. In addition to digitizing the end to end supply chain network the platform also empowers the unorganized sector to access supply chain credit from formal banking system there by eliminating the major growth barrier for their growth.