India’s M1NXT Looks to Expand Trade Finance Offering

Indian trade financing firm M1NXT is testing the country’s International Trade Financing Services (ITFS) platform.

With ITFS, small businesses will be able to get early payments at lower interest rates after exporting their goods, the website Financial Express reported Sunday (Jan. 22).

“The organization is trying to onboard and engage with as many national and international banks as possible for bringing the liquidity for the exporters of India,” Jacob Raphael, M1NXT’s chief executive, said in the report.

PYMNTS has contacted the company for comment but has not yet received a response.

The Financial Express report notes that while trade financing is a multitrillion dollar market, India accounts for just $6 billion of that share.

The company’s efforts come as digital technology is driving innovation in the world of trade finance, leading to a more streamlined process, as noted here recently.

“In the past, trade finance was bogged down by lengthy risk assessment and underwriting processes, and accessing credit could take days or weeks, especially if it was a business’s first time doing so,” PYMNTS wrote Jan. 12.

But as banks and their partners have expanded their digital toolkits, the lending process has accelerated to the point that many trade finance loans can now be approved and paid within the same day.

This has brought about the development of new lending products like Santander’s business-to-business (B2B) buy now, pay later (BNPL) service for multinational corporations.

Created in collaboration with Allianz Trade and Oslo-based BNPL FinTech Two, the solution will let companies offer business clients a consumer-style BNPL option with near-instant approval with the help of Allianz Trade’s API-backed automatic credit assessment technology and database containing financial info on upwards of 80 million businesses.

Meanwhile, SMBs could be at a disadvantage when it comes to trade finance, PYMNTS wrote late last year.

Credit markets are dominated by a handful of players, with the International Chamber of Commerce estimating that 90% of trade finance is provided by 13 banks.

More than half of trade finance requests are rejected by SMBs, far outpacing the 7% rejection rate for multinational corporates, according to the World Trade Organization.

“The ‘gap’ can be plugged, at least in part, by data, by FinTechs harnessing that data to help smooth the way forward for SMBs to get the credit and the cash they need in hand to facilitate trade,” PYMNTS wrote.