KredX allocates Rs 1500 crores to power MSMEs ahead of festive season

Manish Kumar, Founder & CEO at KredX said, “The festive season stands as a crucial period for MSMEs as they witness an enormous uptick in sales during this time. However, the credit gap that the MSMEs have been facing is appalling and has led to stunted business growth for the segment. This initiative comes at a pivotal point, as it has been predicted that the economic downturn will halt the growth trajectories of many industries."

KredX, India’s one of the largest supply chain finance platform, recently announced its plans to disburse ₹1500 crores working capital, over and above the usual disbursement, to cater to the increasing working capital needs of MSMEs ahead of the upcoming festive season.

The supply chain finance platform carried out a study and the finding states that a credit gap of $380 billion could be felt acutely in the runup to the festive season, during which MSMEs witness increased demand for goods and services.

The study states that out of 63.05 million estimated MSMEs in India, around 71 percent experience a significant increase in sales during the festive season, with 42 percent comprising of online businesses. Further, almost 57 percent of working capital demand arises from tier-1 cities with Bangalore leading from the front, followed by Mumbai, Delhi NCR, Pune, Chennai and Hyderabad. The remaining 43 percent of the demand arises from tier 2 and 3 cities with Nasik, Guwahati, Coimbatore, Vadodara and Bhopal leading the demand.

The study further states that an average e-commerce MSME witnesses about 40-50 percent of their annual sales during the three month period. Further, the working capital requirement for such MSMEs typically ranges from one to ten crore. Further, the credit gap that exists for e-commerce MSME players is about 200-300 percent.

Logistics industry being a capital intensive sectors incurs high operating costs, witnesses a credit gap of about 300-400 percent.

Manish Kumar, Founder & CEO at KredX said, “The festive season stands as a crucial period for MSMEs as they witness an enormous uptick in sales during this time. However, the credit gap that the MSMEs have been facing is appalling and has led to stunted business growth for the segment. This initiative comes at a pivotal point, as it has been predicted that the economic downturn will halt the growth trajectories of many industries.”

Kumar added, “We are aggressively working towards addressing the credit gap and paving a route to efficient and hassle-free credit access. KredX has allocated an additional 1500 crores as working capital to empower MSMEs and ready them ahead of the festive season. We are also noticing a huge demand uptick from the tier 2 & 3 cities and we hope to bring door-step and affordable finance across India. For the next 12 months, we will be focussed on very aggressive growth and aim to double the disbursement by the 2023 festive season.”