Blogs

Supply Chain Finance: Bridging the Gap of Funding for MSMEs

Supply Chain Finance (SCF) is like the middleman you actually need in your life—it connects MSMEs, buyers, and financiers in a way that ensures everyone gets paid on time.

With SCF, instead of waiting endlessly for buyers to clear invoices, MSMEs get instant working capital, and buyers still get payment flexibility. It’s a financial win-win that keeps supply chains running smoothly.

• How Does SCF Work?

1. MSME supplies goods to a large corporate buyer.

2. Instead of waiting for the invoice to be paid in 90 days, the MSME sells it to a financer (a bank or fintech).

3. The financer pays the MSME immediately, ensuring cash flow isn’t blocked.

4. The buyer repays the financer later under agreed terms.

• Why Is This a Game-Changer for MSMEs?

• No More Cash Flow Nightmares: MSMEs get paid fast.
• Low-Cost Financing: Interest rates are lower than traditional loans.
• No Collateral Required: The invoice itself acts as security.

• Conclusion

SCF ensures that businesses never run out of cash, buyers enjoy extended payment terms, and the economy benefits from an uninterrupted flow of goods and services.