Drip Capital and Vayana TradeXchange Partner on Trade Finance Solutions

Drip Capital and Vayana TradeXchange have partnered on trade finance services for small to medium-sized exporters.

Through this partnership, Drip Capital — which offers post-shipment export financing — will use Vayana’s International Trade Finance Service (ITFS) platform to convert Indian exporters’ trade receivables into cash, the companies said in a Thursday (Dec. 22) press release.

“This partnership will assist Drip in its mission to make global trade simple and accessible to small businesses,” Drip Capital CEO and Co-Founder Pushkar Mukewar said in the release. “Pooling our resources together for such digital innovations in cross-border trade will further help Indian MSMEs [micro, small and medium enterprises] grow and, in turn, contribute significantly to the economy and become globally competitive.”

Drip bridges the working capital gap among small businesses, uses technology to provide easy and quick funds, and offers bill discounting facilities to exporters without requiring them to pledge any collateral, according to the press release.

Vayana’s auction-based electronic platform facilitates cross-border trade financing at competitive terms by enabling financiers, exporters and importers from all over the world to discover each other and connect through a digital platform, the release said.

“We are happy to partner with Drip in providing access to easy and affordable export financing options to lakhs [hundreds of thousands] of small and medium Indian exporters,” Vayana TradeXchange Managing Director and CEO Kalyan Basu said.

Small to medium-sized exporters account for 45% of Indian exports but have difficulty accessing working capital because traditional lenders seek collateral and have time-consuming processes, according to the press release.

Most trade finance banks focus mainly on larger corporations when extending credit, leaving “a very large chunk” of the market underserved, Mukewar told PYMNTS’ Karen Webster in an interview posted in January 2021.

“When you think of any cross-border transaction — let’s say an importer in the U.S. places an order with an overseas exporter — the exporter has to procure raw materials, manufacture the goods, ship those goods out and then wait another 60, 90 days to get paid,” Mukewar said at the time. “And this creates a working capital gap for them, and that’s what we are trying to address with our solution.”