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Business EconomyPosted at: Jul 11 2019 4:58PM


Drip Capital partners with FIEO to empower Indian SME exporters

Mumbai, Jul 11(UNI) Drip Capital, a US based fintech company, has signed a memorandum of understanding (MoU) with the Federation of Indian Export Organisations (FIEO), the apex body for export promotion set up in partnership with the government of India.
The two organisations will partner to provide exporters with training in technology and invoice factoring. The partnership will give small-and medium-sized exporters exposure to fintech solutions, widely considered to be one of the biggest disruptors in cross-border trade. Small exporters, who are often overlooked by banks or are otherwise unable to access the traditional banking system, can leverage these solutions to their benefit. The Drip-FIEO partnership aims to help exporters understand these opportunities better, a release said.
The existing paper-based trade finance system is inefficient and biased against smaller exporters. These exporters spend time they cannot afford in battling bureaucracy and slow processing times, as well as demands for collateral. This is what Drip Capital aims to fix, with its focus on collateral-free, technology enabled finance.

''Our idea is to create an automated platform that would address the working capital needs of SMEs, not just in India, but across the world. What we want is to level the playing field for SMEs everywhere and give them easy access to trade finance,'' said Mr. Pushkar Mukewar, Co-Founder and Co-CEO, Drip Capital.
Helping SME exporters with trade finance also feeds into a larger goal of giving the country’s overall economy and GDP growth a boost. Multilateral agencies like the World Bank have found that economies gain immensely when trade increases, especially in the MSME sector.
Trade-related challenges cannot be tackled by private companies alone. FIEO is a trade promotion body backed by the government of India, and can reach the widest network of exporters in the country.
''In India, MSMEs contribute to about 50 pc of the total exports (merchandise as well as services). It is vital that this segment is given a boost. A growth in exports will mean a stronger economy, and this segment has the potential to create more jobs in India,'' said Dr. Ajay Sahai, Director General & CEO, FIEO.
Under the provisions of the memorandum, FIEO, in partnership with Drip Capital, will conduct a series of awareness raising events among MSME exporters across the country.

The memorandum between Drip and FIEO will also result in the creation of an online platform that will help exporters free up their working capital (locked in export receivables) by discounting them. Through this platform, Drip Capital will underwrite and set up post-shipment credit facility for exporters in a transparent and hassle-free manner.

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