KredX plans to disburse Rs 1,500 crore working capital to MSMEs ahead of festive season

NEW DELHI: Supply chain finance platform KredX on Friday said it plans to disburse Rs 1,500 crore in working capital to cater to the financing needs of MSMEs ahead of the upcoming festive season. The platform expects a higher credit demand from e-commerce and logistics sectors in addition to D2C brands, travel and entertainment this year.

KredX, in a statement, said that it disbursed an additional Rs 554 crore in working capital to about 450 MSME players in the 2021 festive season. The credit demand rose by 300 per cent in segments such as fashion, appliances, food & beverages and entertainment in the last season.

“KredX plans to disburse Rs 1,500 crore working capital, over and above the usual disbursement, to cater to the increasing working capital needs of MSMEs ahead of the upcoming festive season,” it said.

This additional allocation comes at a time when this sector, which accounts for 27 per cent of GDP and is crucial to the functioning of the economy, is staring at an acute credit gap of about USD 380 billion, KredX claimed.

The platform said that it has designed a programme with attractive cashback and low discounting rates.

According to a KredX study, e-commerce MSMEs witness about 40-50 per cent of their annual sales during the festive season while logistics MSME players clock about 30-40 per cent of their annual sales during this period.

The working capital requirement for such MSMEs typically ranges from Rs 1-10 crore. However, a huge credit gap exists for e-commerce MSME players and the logistics industry, which is predominantly a capital-intensive sector and incurs high operating costs, the platform said.

Of the 63.05 million estimated MSMEs in India, about 71 per cent experience a significant increase in sales during the festive season, the study stated.

Almost 57 per cent of the working capital demand arises from Tier-1 cities such as Bengaluru, Mumbai, Delhi-NCR, Pune, Chennai and Hyderabad. The remaining 43 per cent of the demand arises from Tier 2 and 3 cities with Nasik, Guwahati, Coimbatore, Vadodara and Bhopal leading the demand, it added.

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