SESSION ON EXPORT FACTORING FOR SME'S ORGANIZED BY FIEO PUNJAB CHAPTER

More than 100 delegates representing various industrial segments attended the seminar

Ludhiana, June 10, 2019: FIEO Punjab Chapter organised an Interactive Session on "The Invoice Finance Advantage-Collateral-Free Trade Finance" at Ludhiana with experts from DRIP CAPITAL, which is a California, United States based Fintech Company. The focus of DRIP CAPITAL IS on solving the working capital problem for SME exporters using technology. Its working capital offering to exporters is a credit line, ranges from USD 100 thousand to USD 2.5 million, depending on the exporter’s size and requirement. Unlike banks, the financing is unsecured and offered without any collateral. Mr. Vikas Yadav, Senior Business Development Manager, DRIP CAPITAL conducted the session.

While interacting with participants Mr Vikas Yadav said that, “Factoring is a tool for obtaining quick access to short-term export financing and mitigating risks related to payment delays and defaults by overseas buyers, is gaining traction the world over. Countries like Brazil, China, Germany and Taiwan have leveraged factoring to grow their exports. Despite the many advantages of factoring, lack of awareness, a perception of high interest rates and cumbersome documentation processes have prevented the growth of factoring services in India. The fact is that, less than a percentage point only of India's exports are backed by factoring services. For any industry, large or small, banks have been the traditional means for raising capital against collateral or some type of asset. Many small companies are unable to raise the needed capital because of a lack of assets, Factoring here in such cases, can offers a great support, as it has supported many exporters across the globe with a financing solution. However, factoring has not yet gained acceptance in India in the way it has in other major exporting nations like China, France, Italy and Germany. Embracing factoring services can also give a real boost to Indian exports”.

Mr. Sarvjit Singh (Proprietor, Man International) representing FIEO Punjab, while addressing the gathering said that, “The objective for organizing such a session is to sensitize our exporting fraternity about the concept of Export Factoring, which implies purchase, funding, management and collection of short term accounts receivable based on goods and services provided to foreign buyers. Export factoring has several benefits viz. increased sales in foreign markets by offering competitive terms of sale, protection against credit losses, accelerated cash flow with no additional asset / collateral requirement, liquidity to boost working capital. There is a large extent of mis-conception regarding the Export Factoring in our business environment, that even the prominent exporting organizations in our country, be it large or small, most of them are much unaware of export factoring concept as a means of finances, or even if they do have the knowledge, they will be apprehensive about the process and expenses incurred to avail it”. Mr Gurmeet Singh Kular, President, Federation of Industrial & Commercial Organizations (FICO) also joined the session as Special Guest during the session and shared his views on future of Indian industries and the challenges, which the Indian entrepreneurs are likely to face while doing businesses Globally in the coming times.

The session was well attended by more than 100 delegates representing various industrial segments.