In today’s highly dynamic business landscape, small and medium enterprises (SMEs) face various operational challenges, which include restricted cash flow or crunched capital. However, there is an innovative financial solution known as supply chain finance which has emerged as a savior for SMEs, providing them with the necessary liquidity and flexibility to grow and thrive.
In 2018, the Reserve Bank of India introduced co-lending where both banks and non-banking financial institutions (NBFCs) could come hand-in-hand to serve the credit sector. These NBFCs are increasingly merging financial services with technological advancements. The idea behind co-lending is to combine the strengths of both parties. The established banks bring their experience, regulatory compliance, and access to funds, while the fintech companies contribute with their advanced technology, data analytics, and a customer-centric approach. This partnership allows them to offer loans more efficiently and to a broader range of borrowers.
The loan market in India has undergone a sea change from what it was a decade ago. Different types of financing options have emerged today to ensure that customers can get a hold of their favorite products/services, even if they don’t have the sources to pay for them upfront. One type of financing that is highly popular today, especially in the automobile sector, is dealer finance. What is this concept all about, and how does it help the parties involved in it? The following sections will answer these questions for the readers.
Embedded finance has become one of the most popular revenue channels for businesses today. Embedded lending has allowed even non-finance companies to integrate financial services into their products/services to provide their customers with an enriching and satisfying experience. For example, the online retail giant, Amazon, integrates financial services like payments, easy EMIs and other options so that the customer doesn’t have to leave the site at all. From shopping to payment, everything is done under one roof, and this is the power of embedded finance.
In the dynamic world of business, the need for funding is a constant reality for companies across all scales. Businesses are always on the lookout for funding solutions to bridge to meet their various costs, the prime being operational costs. Fortunately, the financial industry continuously responds to this demand by introducing newer arrangements and setups to cater to the specific lending needs of businesses.
In today’s highly dynamic business landscape, small and medium enterprises (SMEs) face various operational challenges, which include restricted cash flow or crunched capital. However, there is an innovative financial solution known as supply chain finance which has emerged as a savior for SMEs, providing them with the necessary liquidity and flexibility to grow and thrive.
The co-lending model has emerged as one of the most promising financial strategies in the Indian lending landscape, which brings banks and non-banking financial companies (NBFCs) together to cater to the diverse credit needs of borrowers. This collaborative approach brings synergy and agility to the lending sector and enables financial institutions to overcome individual limitations and unlock the potential of lending in India. Co-lending fosters synergy and agility by combining the strengths of banks and NBFCs, to further augment collaboration, inclusivity for a diverse range of borrowers, adaptability and operational efficiency.
B2B Buy Now Pay Later / Digital Payment / BNPL Payment
The B2B Buy Now Pay Later (BNPL) market has grown phenomenally in the last two years, especially since the time of the pandemic. With more and more people opting to shop online, and with digital payment options increasing steadily, BNPL became one of the most sought-after payment mechanisms. The BNPL payment method is expected to grow to about 9% in 2024, while it was only 3% in 2020.
All companies, even the large ones, time to time need financial backing and they turn to various lending platforms to get funds for their operations, expansions and more. It may not be possible for these companies to approach traditional financial institutions like banks, every time they need a loan. This is because they may not have the necessary collateral proceed with this process, or they may already have existing debt which makes it difficult to avail of further loan. Also, new companies may not have a strong credit history. This also makes it challenging for them to get bank loans. This is where vendor finance comes into play. Vendor finance is a good option for all companies, especially the large ones, that are looking for quick, short-term financing arrangements.
Business to business financing is simply the finances available to the companies that work primarily with other companies. Traditionally banks dominated such finances, but recent rise in fintech sector, have made finances more accessible in the b2b market, these fintechs have made the process involved much simpler and any b2b business can take advantage.
