Think Big Solutions, a local fintech, on Sunday launched a digital factoring platform to provide financing solutions to small and medium-sized enterprises (SMEs).
Tredxonline, the platform, aims to bring together SMEs, financial institutions, businesses and their suppliers to facilitate access to supply chain finance for SMEs, Think Big Solutions said in a statement on Saturday.
Ms. Masrur Reaz, Managing Director of Think Big Solutions, said that SMEs account for a quarter of the country’s gross domestic product, but many of them have limited access to formal finance.
Micro, small and medium-sized enterprises still find it difficult to access credit because they are sorely lacking in guarantees. In addition, SMEs also have their working capital stuck in invoices payable by large companies.
“Thus, factoring as a product is best suited to meet the needs of SME suppliers, where factoring companies and banks could have reduced their approved invoices and provided suppliers with much-needed liquidity,” did he declare.
Factoring is a financial arrangement where a business sells its accounts receivable or invoices to a third party at a discount to meet its immediate capital needs.
“But even though factoring has been available in Bangladesh for over a decade, factoring as a product class hasn’t really taken off,” Reaz added.
The Managing Director went on to say that TREDX will ensure that the suppliers of good companies always get the best discount rates and that the companies themselves will be satisfied that their main suppliers always have access to low cost funds from all financial institutions.