Supply Chain And Finance

1. How does the Modern Trade Finance Ecosystem work? To understand how the trade finance ecosystem works, one must take a look at the various parties in play – participants and facilitators. The core participants (parties that take part directly in the trade process) include financial institutions, buyers (large industrial entities), suppliers (SMEs) and tech providers. Facilitators include players that don't take part in trade transactions but are important in facilitating the trade process. They include trade organizations, governments and logistics providers. The entire process revolves around the movement of three core ingredients – goods & services, money and technology services. While logistics takes care of the goods and services, organizations like TASConnect play an important part in the movement of cash, which is done with the help of tech services and proper usage of trade data.

2. Supply Chain Finance solutions attempt to solve three big challenges for MSMEs, namely liquidity crunches, simplifying transactional complexities and B2B market access. Here’s the simplified explanation. The modern Supply chain Finance ecosystem works by giving financial institutions a better overview of MSMEs seeking financing. All relevant data is not kept in silos but in one large data pool, which is then decoded, analyzed and provides valuable insights to financing agencies (banks, institutional investors, etc.) to judge credit worthiness based on liquidity, trade volume, payables and receivables, and other data points. This is of course made possible by software and tech companies which can make custom solutions for a large corporate entity, banks, or even an association of FIs. The quickness of the process, aided in part by automation, frees up much needed capital which can otherwise remain stuck in trade channels. It provides liquidity, speeds up the asset conversion cycle and makes MSMEs much more financially viable. Lastly, it enables smaller players to get better terms for funds and become investment-worthy. For more, visit us at www.tasconnect.com