Ujjivan Small Finance Bank (Ujjivan SFB) has entered into a strategic partnership with Veefin Solutions, a supply chain finance (SCF) solutions provider, to offer supply chain finance offerings to meet the working capital needs of MSMEs.
Through this partnership, Ujjivan SFB will leverage Veefin's platform, which offers end-to-end solutions for supply chain financing, according to a company statement. This includes supplier and vendor onboarding, credit underwriting through the Loan Origination Solution (LOS), transaction management via the Loan Management Solution (LMS), and collections handled through the Delinquency Management Solution. These components will be further complemented by comprehensive analysis facilitated by Veefin’s reporting and business intelligence solutions.
A 2019 report on the MSME sector by a RBI committee estimated the overall credit gap in the sector at Rs 20–25 lakh crore. According to Credable, a working capital technology platform, out of over 64 million MSMEs in India, only 14 per cent have access to credit.
The number of MSMEs in the country is expected to grow from 6.3 crore to approximately 7.5 crore in the coming years, growing at a projected CAGR of 2.5 per cent, as per a report by SIDBI-TransUnion CIBIL. SIDBI stands for Small Industries Development Bank of India, while TransUnion CIBIL is a company that provides economic opportunities, and personal empowerment for millions of individuals in India.
Recognising the role of technology to address this credit gap, the partnership with Veefin aligns with Ujjivan SFB’s objective of extending financial solutions to MSMEs across the nation, according to a company statement. This initiative will facilitate Ujjivan SFB to provide working capital loans to MSMEs via supply chain financing, effectively addressing the gaps left by the traditional model.
Ittira Davis, MD & CEO at Ujjivan Small Finance Bank, said, “This association will help us build on operational efficiency, thereby empowering more MSMEs to chart their growth paths.”
Raja Debnath, Managing Director of Veefin Solutions Ltd., said, "Together, we are poised not only to broaden the SCF landscape but also to drive inclusive growth, reaching even the most marginalized segments of our economy.”
