KredX secures final nod to launch cross-border trade finance

Invoice discounting startup KredX has gone live on International Trade Financing Services, a cross-border trade financing platform. This will enable KredX GTX, run by its wholly owned subsidiary KredX Ventures IFSC, to start invoice discounting for both Indian exporters and importers.

The Sequoia Capital and Tiger Global-backed company has successfully conducted live transactions during sandbox testing and has received a final approval to go ahead with its commercial operations from International Financial Services Centres Authority (IFSCA), the authority which has developed India’s Gift City in Gujarat.

In 2021, the IFSCA issued a framework for setting up and operating ITFS, an electronic platform which would enable both exporters and importers to avail different trade finance facilities at competitive rates.

Through ITFS, businesses can avail facilities like reverse trade financing, bill discounting through letter of credit and supply chain finance among others – helping them convert these trade receivables into liquid funds.

The move was in line to help the country become a driver for exports, solve for limited credit options for micro, small and medium enterprise (MSME) importers and exporters, and give access to more suited financiers both domestic and globally for these businesses. It is also in line to push India as one of the global financial hubs.

Currently, Vayana Network (through Vayana TradeXchange), M1xchange are the other platforms which have begun operations on the ITFS platform.

Commenting on the procurement of the licence, Anurag Jain, founder & executive director at KredX said, “GTX will benefit from synergies with KredX’s domestic platform to maximize reach and create a one stop solution for businesses looking for working capital in India.” KredX GTX has already onboarded both domestic and international financiers and has generated substantial interest with over 200 exporters and importers currently at various stages of registration, it said in a statement.

“We have already executed several cross-border trade finance transactions for large enterprises with an annualised value of more than $50 million within a period of last 4-5 months,” Jain added.

The company said that through KredX GTX it is looking to facilitate financing worth $2 billion through its platform in the next 18 months. By the end of 2023, it is looking to execute over $500 million of financing, and already has a pipeline of $350 million in transactions.

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