Nagpur News
How a Pune Company is Empowering Indian MSMEs with Crucial Financial Support?
India is experiencing significant growth in the Micro, Small, and Medium Enterprises (MSME) sector, with projections indicating it could reach $1 trillion by 2028. Companies like Vayana are facilitating this growth by providing trade credit ranging from Rs 1-5 lakh to small businesses, such as local kirana stores.Since its inception in 2017, Vayana, headquartered in Pune, has collaborated with over 300,000 MSMEs and 1,300 corporates, making it easier for supply chains to access affordable financing.
Ramaswamy Iyer, Founder-CEO of Vayana, highlights the challenges faced by micro-businesses, stating, “India has more than 70 million businesses, with 69 million generating less than Rs 1 crore in annual turnover. These small enterprises, including kirana stores and pharmacies, operate on very slim profit margins. When they need funds to purchase goods or extend credit to customers, the interest rates they can afford are extremely low. Even a 2% interest rate can consume their entire profit from sales. Thus, the real issue is not a lack of access to credit, but rather a lack of affordable credit.”Vayana’s approach involves engaging with various levels of a company’s supply chain that has established trade relationships with larger, more creditworthy entities. Iyer explains, “Small businesses don’t just receive funds; the money is allocated for specific transactions.
If a small business is buying from or selling to a larger, credible entity, we provide the funds directly to that entity’s account.”This model has proven effective, with Vayana recovering loan amounts in 99.9% of cases. Iyer notes that borrowers are motivated to repay because they receive low-cost loans for their daily operations.Additionally, Vayana offers risk data to corporates to help them assess the health of their supply chains and acts as a conduit for GST compliance. “Through these three products, we facilitate nearly Rs 9,500 crore in financing each month,” says Iyer.
Despite these achievements, Vayana recognizes that it has only tapped a small segment of the market. Looking ahead to 2025, the company aims to expand its reach to more small businesses. “We are also focusing on cross-border export and import businesses, seeking ways to reduce borrowing costs for these transactions. We have established a cross-border trade exchange in GIFT City, Ahmedabad, which will be a key area of focus for our future growth,” Iyer adds.
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