‘M1 Exchange is a Solution to Age Old Problem of Working Capital’

‘M1 Exchange is a Solution to Age Old Problem of Working Capital’

We know that the SME entrepreneur when sells their goods and services to a large corporate. They often struggle to collect the money from the large corporate and that money is nothing but his working capital. So, once the invoice is submitted to large corporate through a platform the large corporate will accept the invoice that goods have been received, services have been received and it is good for payment as per credit terms. So,the SME will get the payment instantly. By discounting, which the banks will come and bid for the best rate of interest. This is a unique methodology that  Sundeep Mohindru, Founder & CEO, M1 Exchange have developed to offer a strong solution for delayed payments to the SMEs.

Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

We know that the SME entrepreneur when sells their goods and services to a large corporate. They often struggle to collect the money from the large corporate and that money is nothing but his working capital. So, once the invoice is submitted to large corporate through a platform the large corporate will accept the invoice that goods have been received, services have been received and it is good for payment as per credit terms. So,the SME will get the payment instantly. By discounting, which the banks will come and bid for the best rate of interest. This is a unique methodology that  Sundeep Mohindru, Founder & CEO, M1 Exchange have developed to offer a strong solution for delayed payments to the SMEs.

Mynd Solutions is an outsourcing and consulting firm and in 2015, RBI had given in-principal approval to 3 entities to deal in TReds (Trade Receivables Discounting System). The use of TReds is aimed at improving the flow of working capital at a very competitive interest rates to MSME by reducing the receivables realization cycles. Mynd Solutions is one of the 3 entities.

In an exclusive interview with Faiz Askari of SMEStreet, Sandeep explained the market dynamics and unleashed several critical aspects of working capital.

Edited excerpts:

Faiz Askari: Please share some details about M1 Exchange.

Sandeep: M1 Exchange a market place where banks will bid and basis the best bid the SME will get the payment instantly and then the payment from the large corporate will be collected by the bank.

Mynd Solutions had launched M1 Exchange that deals in TreDS and had gone live on April 7, 2017 for the customers (MSME sellers, corporate buyers and financiers – both banks and NBFC factors).
M1 Exchange has already on-boarded many large Corporate, their vendors (MSME) and banks to do the transactions. The use of TReDS is aimed at improving the flow of funds to micro, small and medium enterprises (MSMEs) by reducing the receivables realisation cycles. TReDS will allow SMEs to post their receivables on the system and get them financed. The manual bill discounting market size currently stands at Rs 30,000 crore annually. With the online system coming in place, it is only expected to grow manifold in the years to come.

 

What is the unique advantage of M1 Exchange?

Sundeep: The advantage of M1 Exchange for SMEs is that will be able to get funding without any collateral, without any paper work. The payment gets instantly and the customer doesn’t have to worry about the collections.

 

Faiz Askari:  How do you ensure the authenticity of invoice and payment process?

Sundeep: In this platform we are taking that approved invoice for a payment, which has been accepted by a corporate buyer so that means corporate buyers.

 

Faiz Askari: Please highlight the utility of invoice discounting.

Sundeep: Invoice discounting is something that the platform offers. Before the work is delivered discounting does not happen. This platform actually comes as a solution for delayed payments. In addition, with this platform the entrepreneur can deploy his money immediately for the next working capital for next project he doesn’t have to wait for 60 days or 90 days.

Faiz Askari: How the payment does get collected at the SMEs level?

Sundeep: The platform is controlled by RBI so there is NPCI which is National Payment Corporation of India.

Faiz: Please give a brief about your organization.

Sundeep: Mynd Solutions was started in 2002, so we are a 15 year old organization. M1 Exchange was started in April 2017.

Faiz: Other than working capital is there any other loan or VC support you provide or your platform provides?

Sundeep: We can always help. The platform is meant for working capital support as of now but if SMES is looking for any GST support, VC support we can always provide because Mynd Solutions is committed towards the financial support to SMEs.

Faiz: Is it like a subscription based model?

Sundeep: This M1 Exchange which is about working capital finance, it is per invoice. Mynd Solutons is service based model depending on the volume of business and region of business. In the M1 Exchange model, we are going step-by-step so that there are node faults where the SMEs supplying to larger corporate which are more reputed, which are more branded rather than going to very-very small.

Faiz: In terms of manpower, how big is your team?

Sundeep: M1 Exchange is total is about 28 people as of now but Mynd Solutions is 1200 people.

So we have on-boarded 21 large corporates and by this month end at least 4 more large corporates will join our platform.

Faiz Askari: What is the size of business you are expecting?

Sandeep: If we have 25 large corporates in our network, We can assume 100 Crore worth of business from each corporate we can surely look at doing a business of Rs 2,500 Crore.

Faiz:  Can you name few of your large cooperates?

Sundeep: KEI Cables and Syska are some of my leading corporate clients.

Leave a Reply

Your email address will not be published. Required fields are marked *