CredAble, a Supply Chain Financing FinTech Platform and NBFC has announced the closure of India’s first invoice backed securitisation transaction with Non-Banking Financial Company Northern Arc Capital, in a bid to ensure sufficient supply chain liquidity cushion & optimal working capital.
As invoice financing is one among the oldest financial products and has been conventionally dominated by banks and a few NBFCs.
However, capital market investors such as asset management funds have not been able to access this multi-trillion market, primarily due to the unavailability of an eligible instrument. CredAble in association with Northern Arc has underlined this issue by creating a listed instrument which can be subscribed by investors.
Nirav Choksi, Co-Founder &Chief Executive Officer of CredAble says, “CredAble has the vision to enable large scale liquidity programs for enterprise clients partnering with the entire financial ecosystem including capital markets and we are pleased and elated to have associated with Northern Arc in enabling this historic transaction. This is a huge step towards fulfilling that vision. The structure will open the short-term supply chain financing asset class to capital market investors, as well as non-traditional investors, UHNIs and FPIs. We now have potential to unlock working capital for the entire value chain of our enterprise clients, on both the payables and receivables side – covering suppliers, sub-vendors of their suppliers, distributors, dealers and retailers. ”
Kshama Fernandes, Managing Director and Chief Executive Officer of Northern Arc Capital said, “We are delighted to partner with CredAble for the structuring of this landmark transaction. The structure will allow corporates to access the securitisation market which has so far been mostly dominated by NBFCs. As part of the transaction, we have extended our very successful MOSEC™ platform to non-financial entities as well. This was also the first time we structured a ramp-up based MOSEC™”
Explaining the liquidity of funds in NBFCs & FinTechs, Choksi, further added that, “NBFCs & FinTechs are playing an important role in the economy and this association will serve to boost liquidity available to supply chains and strengthen CredAble’s ability to provide liquidity solutions to our corporate clientele and their vendors.”
In addition to its online platforms for invoice acceleration, that cover both payables and receivables for large enterprise clients, CredAble has also pioneered the “Just-in-Time” financing program that allows suppliers of large corporates to receive payment at a pre-invoice stage, based on certain delivery/service milestones that are tracked by CredAble’s technology in real-time. Whereas, Northern Arc Capital has pioneered several innovative and revolutionary structures in the Indian market including the Persistent Securitisation transaction (PERSEC™), Covered Bond (COBON™), Multi-Originator Securitisation (MosecTM) and the Single Issuer Partially Credit Enhanced (SPiCETM) Bond.