BANGALORE, India, Nov. 11, 2021 /PRNewswire/ — Jana Small Finance Bank has taken a significant step in easing the flow of liquidity to its MSME customers by tying up with all the three existing TReDS platforms, namely M1xchange, RXIL, and A.TReDS. The partnership with Jana Small Finance Bank will now provide buyers and suppliers registered on all the TReDS platforms with a variety of options to secure funds by discounting invoices after sale.
The Trade Receivables Discounting System (TReDS) has been set up by RBI, in order to resolve the credit challenges faced by the MSME suppliers by enabling discounting of their invoices and bills of exchange. TReDS ensures timely payments to MSMEs that access credit by posting their trade receivables on the system and getting them financed at a competitive rate through an auction mechanism where multiple financiers can bid on invoices accepted by PSUs/corporate buyers. Consequently, not only does this give MSMEs greater access to liquidity but it also puts greater discipline on corporates to pay their dues on time.
For MSME suppliers, TReDS offers the benefits of easy and quick availability of finance by discounting receivables at competitive rates, minimum and simple documentation, and overall better working capital management. For buyers of the goods or services such as corporates, government departments, PSUs, etc., the platform helps to optimize working capital, reduced procurement cost, improve vendor management and lower administration cost for vendor financing, payments and settlements. It is a single platform for sellers, buyers and financiers, making financing of trade receivables easy with no paper work, online transactions, competitive discount rates, seamless data flow, and standardized practices.
With the economy recovering after the COVID pandemic, Jana Small Finance Bank has been seeking to bolster its goal of building a robust and diverse MSME portfolio by stepping up its focus on supply chain financing. This partnership with all the three TReDS platforms is inclusive and provides access to a broad range of MSME loan-seekers.
Sumit Aggarwal, Head of MSE, Supply Chain & Financial Institutions, Jana Small Finance Bank said, “MSMEs contribute 30% of India’s GDP, their growth depends on the availability of convenient, collateral free funding solutions to finance average outstanding receivables of Rs 500,000 crores per year, due to the time lapse between raising an invoice and receiving payment. By partnering with all available TReDS exchanges, we intend to become the go-to solution provider of supply chain finance to MSMEs that wish to unlock working capital without having to post collaterals or go through lengthy loan application processes.”
About Jana Small Finance Bank
Jana Small Finance Bank Limited (Jana Small Finance Bank) is one of the leading Small Finance Banks of India in terms of assets under management and deposit size as at March 31, 2020, as per the report titled ‘Overview of Banking Sector in India‘ dated March 12, 2021, issued by IRR Advisory (“IRR Report”). Jana Small Finance Bank has the second most geographically diversified portfolio with a pan-India presence among all Small Finance Banks in India as at March 31, 2020 (Source: IRR Report). As at February 28, 2021, Jana Small Finance Bank had 611 Branches, including 166 Branches in Unbanked Rural Centres, and 134 ATMs located in 229 districts in 19 states and three union territories. Jana Small Finance Bank has served over 8.00 million customers since 2008, including approximately 3.05 million active customers.
Jana Small Finance Bank Limited (the “Bank”) is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its equity shares and has filed a draft red herring prospectus (“DRHP”) with the Securities and Exchange Board of India. The DRHP shall be available on the website of SEBI at www.sebi.gov.in, websites of the Stock Exchanges i.e. BSE and NSE at www.bseindia.com and www.nseindia.com, respectively, and is available on the websites of the BRLMs i.e. Axis Capital Limited, ICICI Securities Limited and SBI Capital Markets Limited at www.axiscapital.co.in, www.icicisecurities.com and www.sbicaps.com, respectively. Any potential investor should note that investment in equity shares involves a high degree of risk and for details relating to such risk, see “Risk Factors” of the RHP, when available. Potential investors should not rely on the DRHP for any investment decision.
This announcement has been prepared for publication in India and may not be released in the United States. This announcement does not constitute an offer of securities for sale in any jurisdiction, including the United States, and any securities described in this announcement may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the Bank and that will contain detailed information about the Bank and management, as well as financial statements. However, no public offering of securities is being made in the United States.
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