PSB Alliance, the entity set up by the 12 state-owned lenders in the country, has tied up with Veefin Solutions, where the latter will deploy and administer a unified cloud-based ecosystem for supply chain financing.
PSB Alliance, is jointly owned by the 12 public sector banks (PSB), each one holding 8.33 per cent stake in the company and became effective early 2022. The company's objective is to undertake common IT and business processes. Veefin Solutions is a BSE-listed company that builds white-labelled supply chain finance and digital lending solutions for banks, financial institutions, fintechs, corporates and B2B marketplaces.
Veefin's unified digital platform will standardise all interactions and connect the lenders' core banking systems with corporate and SME (small and medium enterprises) sourcing partners like fintechs, B2B marketplaces, SME account service providers and e-invoicing players. It will also provide data and analytics.
"The unified platform will enable PSBs and other lenders to get better access to SMEs, lower the cost of sourcing loans and eliminate the need for capital investment and resources in establishing their own tech stacks, and connecting with hundreds of parties," the two entities said on Friday.
SMEs will also get access to supply chain financing from various PSBs, other banks and NBFCs through this one platform.
According to Rajinder Mirakhur, CEO and MD of PSB Alliance, the unmet credit needs of MSMEs are estimated to be around Rs 20-25 lakh crore.
"This project brings all PSBs together as a cohesive force, powered by their combined balance sheet strength and resources, to reduce the cost of sourcing customers and expand their opportunity to provide access to credit," said Mirakhur.
This platform is expected to go live by the end of the current financial year ending March 2024, and over Rs 1 lakh crore worth supply chain finance business is expected on the platform in the next few years, according to Raja Debnath, MD of Veefin Solutions.
"The maximum number of banks, fintechs and NBFCs use Veefin as their supply chain finance solution. We have always given them this technology on an individual basis. Now, we are going to allow them access to come on to a single platform and get access to the entire ecosystem," said Debnath.
Other than this platform for supply chain finance, PSB Alliance is also offering several other services like doorstep banking and operational risk loss data exchange for PSBs.
In doorstep banking, agents go to homes and deliver banking services just like grocery delivery. Currently, doorstep banking is delivered in 100 centres across India and this will now be expanded to 6,800 centres, according to Eric Anklesaria, head of strategy at PSB Alliance.