Category: News Updates

Mumbai: VoloFin is a one-of-its-kind fintech platform, providing end-to-end solutions in the domains of factoring and supply chain financing. The company positions itself as both a lender and a platform, wherein banks can participate in the factoring business.

The trade finance gap in India is immense, and SMEs are the most affected by this phenomenon as they have limited access to traditional banking. Seeking an opportunity in this segment, both Roshan Shah and Anand Tiwari realized that the most effective way to bridge this gap was through fintech and digitization. This prompted them to conceptualize and launch VoloFin in 2020.

Headquartered in Singapore, the company has successfully expanded its presence globally in a short time span, and has offices in India and the USA with a team strength of 40+ odd people. Over the course of time, the platform has onboarded various funds and lenders across the globe, including the Exim Bank of India, along with other leading global banks/funds

Indiantelevision.com caught up with Volofin’s CEO & co-founder Roshan Shah, where he gave insights of his company on several key topics and more….

Edited excerpts

On sharing some brief on VoloFin

VoloFin is the only platform that provides an end-to-end solution for both banks and borrowers. In the market, there are either balance sheet-driven lenders or match-making platforms, whereas VoloFin is a multi-lender platform, whereby we have onboarded various lenders including banks, and provide an end-to-end solution to them.

Our fintech platform undertakes all the activities from origination, onboarding of prospective clients, supplier and buyer assessment/underwriting, transaction assessment, collections, and credit wrap with Insurance. There are either monoline factoring companies in India / outside India financing these cross-border trades OR there are newly started Treds platforms, which are more of a deal sourcing/match-making platform.

We are the only fintech providing end-to-end solutions, from origination to collection, including credit protection with Insurance to platform lenders.

Other than that, we do a lot for the clients(suppliers) and lenders:

  . Protect the supplier against buyer non-payment risk.

. Collateral-free financing

. Best-in-class proprietary tech platform offering full-stack supply chain solutions to lenders/banks.

. Quick KYC and compliance through extensive integration with govt, courts, customs, ports, and other third-party     information sources. Having linked through APIs in or platform

.  Ability to underwrite buyers globally.

.  Framework-based lending models with banks

On VoloFin disrupting the supply chain ecosystem with their production services

VoloFin is a dynamic fintech company, that is actively addressing supply-chain financing challenges with innovative solutions. By leveraging cutting-edge technology, VoloFin enhances transparency and efficiency within the supply chain. Our platform incorporates advanced analytics to assess the creditworthiness of the obligors, expediting financing decisions while minimizing risk. We are committed to innovative technology that ensures a secure and immutable ledger, reducing the likelihood of fraud in financial transactions.

What sets VoloFin apart is its user-friendly interface, facilitating seamless communication and collaboration among various stakeholders. This streamlines document sharing and approval processes, accelerating the overall financing lifecycle. With a focus on these positive interventions, VoloFin is not only overcoming challenges but also contributing to the evolution of a more resilient and agile supply-chain financing ecosystem. Through our innovative approach, Volofin is playing a crucial role in fostering financial inclusion and sustainability within the supply chain.

On sharing some insights on your business growth in terms of MoM and QoQ comparisons

VoloFin is achieving remarkable growth, consistently expanding at an impressive rate of 35-40% month-over-month and quarter-over-quarter. The platform has recently surpassed a significant milestone, crossing USD 100 million in financed receivables, equivalent to approximately INR 1,000 crore.

On the key milestones your business achieved in the past year

2023 Highlights:

. Successfully onboarded India Exim Finserve IFSC Private Limited, a wholly owned subsidiary of the Export-Import Bank of India.

. Pioneered the completion of the first invoice factoring transaction on the ITFS Platform, an initiative by IFSCA in    GIFT City.

. Achieved a total platform volume surpassing USD 100 million.

These milestones showcase steady growth, strategic partnerships, and significant achievements, positioning the company as a key player in the industry.

On benefitting from the SMEs

VoloFin plays a pivotal role in empowering SMEs to flourish and expand within tier-2 cities, fostering growth trajectories. Through tailored financial solutions, VoloFin addresses the unique challenges faced by SMEs in these regions, unlocking avenues for sustainable development.

By providing accessible and flexible financing options, VoloFin enables SMEs to invest in crucial aspects of their operations, such as technology adoption, infrastructure development, and talent acquisition. The platform’s user-friendly interface streamlines financial processes, ensuring efficiency in managing funds and facilitating quicker decision-making.

Moreover, VoloFin goes beyond traditional banking constraints, offering personalized support and insights tailored to the specific needs of SMEs operating in tier-2 cities. This approach not only enhances financial inclusivity but also cultivates an environment conducive to innovation and entrepreneurial success, thereby propelling SMEs towards unprecedented growth and scalability. In essence, VoloFin acts as a catalyst for positive transformation, catalyzing the ascent of SMEs in tier-2 cities. Most SMEs onboarded with us have grown their business multiple times, as we provide them quick financing, not balance sheet driven, without collateral, assuming the buyer risk default and converting their long receivables into instant cash/liquidity, which helps them with the ability to take more orders, buy raw materials, increase their production capacity, etc.

Below are the factors that distinguish us from traditional banks:

. Technology Platform – Our robust platform takes full responsibility for origination, KYC, onboarding (supplier and buyer), credit, operations, debt management, and insurance wrap.

. Our platform provides a one-stop factoring solution to Banks and Lenders

. Lending Partnerships – We have multiple lenders on our platform from APAC to the US, providing us the ability to leverage their strengths including but not limited to, the most competitive pricing, higher risk capacities, wider geographical coverage, and ability to do high-value/volume transactions.

. Credit Processes – The founding team and the core team come from a risk management background and have put their decades of experience into building a strong & robust credit mechanism in the platform, which makes the lenders very comfortable with our quality assessment and their willingness to partner.

. Credit Insurance Coverages – VoloFin’s bespoke Trade Credit Insurance policy provides 100% insurance in case of buyer default. The team has extensive expertise & experience in handling Trade Credit Insurance policies and has designed the policy to meet its specific requirements.

. Wider Geographic Exposure – Our tie-up with lending partners across different countries allows us to take exposure tox geographies such as LATAM Countries, that are currently not being serviced by the existing lenders.

On your growth projections for the upcoming year and any specific targets you’re aiming for

As multiple developments are happening, this year seems most promising with the upcoming announcements to come:

.  Onboarded Exim Bank of India (India Exim Finserve IFSC Pvt Ltd, GIFT City) as a lender, driving volume growth from Q2 2024.

. Top 5 Global Bank integration scheduled for March 2024, commencing with a USD 35 million facility and targeting a USD 150 million line size within three years.

. Advanced discussions underway for equity participation with a large bank and a venture capital firm.

. Anticipating transformative developments in the next month or two, poised to significantly elevate performance metrics for the current year and beyond.

Global trade finance is a vital component of the international economic landscape. It has evolved significantly over the years, and in the 21st century, the global trade finance landscape is complex, presenting opportunities as well as challenges along its growth path.

The interconnected nature of the global economy has expanded trade volumes, creating a demand for efficient and secure financing mechanisms. In such a scenario, technological advancements offer avenues for transforming trade finance and have the potential to streamline and secure transactions, reducing fraud and increasing transparency.

However, the sector also grapples with issues such as outdated regulatory frameworks and a lack of standardization, hindering the widespread adoption of innovative solutions. Let’s look at both sides of the coin: the challenges and opportunities presented by the sector.

The challenges faced by the global trade financial landscape

Global trade growth was slow after the financial crisis in 2008-2009 and witnessed a sharp decline at the onset of the pandemic in 2020. As of mid-2009, the trade finance market is experiencing tough times, and trade credit financing remains a major problem that poses a hindrance to the global trade financial landscape’s growth.

Lack of trade finance, especially in the case of developing countries, has been identified as a major issue by the World Trade Organization (WTO) ever since the Asian financial crisis. Why? Because such countries often fall prey to liquidity shortages during financial crisis scenarios.

Today, trade finance is at the crossroads, especially when it comes to developing nations like India, standing between technological advancements and 19th-century practices. Covid-19 was indeed a wake-up call for the industry. 

It brought people’s attention to the inefficiencies and anomalies in the supply chains. However, the sector grapples with issues such as outdated regulatory frameworks, regulatory compliance, constrained access to trade finance, and a lack of standardization, interfering with the widespread adoption of innovative solutions. Additionally, financial institutions face the challenge of balancing risk management with the need for increased efficiency, along with unstable economic situations and geopolitical tensions.

Unlocking opportunities offered by global trade finance in today’s times

Finance is essential for a healthy, smooth trading system. SMEs account for 90% of businesses across the globe. However, their participation in international trade is limited due to a lack of credit access. Even in India, out of nearly 63.4 million MSMEs, only 15-20% have access to formal credit. However, technologically-driven digital platforms and fintech innovations have been pivotal in facilitating quicker and more accessible trade finance solutions.

Rapid digitization has come with various growth and development opportunities for small businesses. Today, several fintech platforms driven by technology offer alternative financial solutions to small businesses to streamline trade finance processes, making them efficient and accessible. 

The companies offer services, ranging from invoice financing, collateral-free financing, and high-end in-house tech services to protection against buyer non-payment risk, and much more. The MSMEs are thus relieved of payment-related issues and can focus on business expansion and even increase their production capacity. 

At the macro level, this level of financial support is integral to global economic development as it contributes to sustaining operational continuity and maintaining ties within international supply chains.

Additionally, e-commerce platforms and technological advancements have further opened avenues for small businesses to access a global customer base without taking on the burden of expanding their physical footprint. 

In today’s digital era, building a robust tech infrastructure is a priority for businesses, giving them a competitive edge in the market. 

To conclude

Trade finance, geopolitics, and technology can be complex combinations of factors. And in the 21st century, where the economic scenario is unpredictable, the challenges can be severe. This year’s outlook seems to be a mixed bag across sectors, as the United Nations Conference on Trade and Development cited reasons like persistent geopolitical issues, high debt levels, and economic fragility that could possibly hinder the global trade financial scenario. 

However, the pace of technological advancements points toward a progressive scenario, enabling seamless, convenient international trade transactions. Overall, the 21st-century’s global trade finance landscape presents an interplay between both challenges and opportunities. Navigating geopolitical uncertainties and embracing tech advancements will help unlock the potential of global trade finance in the times to come.

(Mr. Roshan Shah, Co-founder & CEO, VoloFin. Views expressed are the author’s own. Please consult your financial advisor before investing.)

Singapore, 17th March 2022 – VoloFin, a blockchain-powered fintech platform with operations in Singapore, USA, and India announces strategic partnership with US-based alternative asset management group, Highmore.

Highmore is an SEC-registered alternative asset management company and was founded by highly experienced team from firms such as Man Group, FrontPoint Partners, Bank of America Merrill Lynch, Citigroup, and Oppenheimer & Co. Highmore presently manages and advises on assets in excess of $2.7 billion. Highmore’s Trade and Specialty Finance business provides innovative working capital solutions to companies in the SME and middle-market universe.

The strategic partnership will support VoloFin’s clients for their working capital requirements and empowering millions of SMEs in the United States and Asian trade corridor.

Commenting on the partnership, Mohit Agarwal, Co-founder & CEO of VoloFin, said “We are extremely elated about this partnership. Highmore’s deep expertise in the working capital solutions business and VoloFin’s ability to use technology to create an attractive investment asset will help bridge the gap in SME financing.”

Dipak Jogia, Co-founder and Managing Partner of Highmore said, “The partnership with VoloFin is an organic extension of our mission which is to provide best in class trade finance solutions to SME’s worldwide. We are excited about our partnership with VoloFin which we believe will be mutually beneficial and provide tailored solutions to SME’s to release working capital and fuel their growth.”