Mynd Solutions Improves the Inflow of Working Capital for MSME via Launch of M1xchange

Mynd Solutions, one of India’s leading outsourcing and consulting companies, today, announced the launch of M1 – Mynd Online National Exchange for Receivables. The platform is live for customers (MSME sellers, corporate buyers and financiers – both banks and NBFC factors) from April 7th, 2017.

M1xchange is an outcome of the RBI’s approval to Mynd Solutions to implement TReDS (Trade Receivables Discounting System). The use of TReDS is aimed at improving the flow of working capital at very competitive interest rates to micro, small and medium enterprises (MSMEs) by reducing the receivables realization cycles. Banks finance the receivables for MSME suppliers on the basis of the credit rating of their large corporate customers.

Commenting on the launch, Sundeep Mohindru, Founder-Director & CEO, M1xchange, said, “It is a matter of pride for Mynd Solutions that we have been assigned the responsibility to set up and achieve the objectives of Trade Receivables Exchange for the country. RBI has carved out the innovativeness on this Exchange of having multiple banks to service large corporate and its suppliers. So it’s a programme of multiple banks servicing the financing needs of multiple suppliers of corporates. So it’s a many-to-many relationship. This has given this platform a new shape of being a market place for Trade receivables financing. Further in India, Exchange has been enabled to comprehensively manage the settlement of transactions that have happened during the day which means that payments to suppliers by the financiers and collection of amount due from the buyers on due date is enabled by the Exchange. As a result Suppliers, Corporate buyers and Financiers get a single point of dealing i.e. the Exchange, in this many-to-many relationship. These unique points are being appreciated by the service providers globally and this will become the future in many other countries.”

M1xchange is built on the fundamentals of pursuing a solution-based approach for client’s adept with innovation and flexibility. It allows MSMEs to post their receivables on the online platform and provide them with the option of generating working capital within 2 working days through a transparent bidding model. It will also enable the availability of funds to the MSME segment at a much lower rate of interest in comparison to the offline market. M1 has already on-boarded 8 corporate buyers and their suppliers for transacting on Exchange. To on-board financiers on the Exchange, M1 has also engaged with multiple banks, like – IndusInd Bank, IDFC bank, Kotak Mahindra Bank, ICICI Bank and DBS bank.

Online terminals of the Exchange are now operational for corporates, MSMEs and the bankers to transact on the platform. Charges will be levied per transaction.

Ms. Charulata Kar, General Manager, Reserve Bank of India (RBI), said, “A platform like this is quite unique, you might not find too many parallels in many other countries. That is a fact that we need to take pride of and this could happen because of the collective interest displayed by all the stakeholders.”

India Opportunities Fund, which is managed by SIDBI Venture Capital Ltd, a leading PE/VC player in MSME space and a wholly-owned subsidiary of Small Industries Development Bank of India (SIDBI) has committed around Rs. 25 crore to Mynd Solutions for the growth and expansion activities of the company.

Mr. Mahendra Lodha, Vice President and CS of SIDBI Venture Capital and Nominee Director of Mynd Solutions has supported the initiative to set up Trade receivables Exchange for financing the MSME sector and has expressed his confidence on the concept and the ability of Mynd’s leadership team – Sundeep Mohindru and Vivek Misra, to make this successful.

M1xchange process:
Step 1: Supplier delivers the goods/services (Outside TReDS)
Step 2: Supplier logs in on M1xchange and uploads the invoice (For e.g. – Rs. 100)
Step 3: Supplier validates the invoice, converts to factoring unit and publishes for acceptance
Step 4: Buyer logs in on M1xchange and accepts the invoice (Rs. 100)
Step 5: Publish the factoring unit for bidding with rating information
Step 6: Financers bid against the factor
Step 7: Accepts the bid (0% interest as bid)
Step 8: M1xchange generates the settlement file to debit financier and pay supplier
Step 9: M1xchange debits financier’s bank account for Rs. 90 and credit the supplier’s bank account
Step 10: On the due date, final settlement file is generated
Step 11: M1xchange debits buyer’s bank account for Rs. 100 and credits the financier’s bank account

About Mynd Solutions:

Mynd Solutions is a leading global service provider in business process and technology management, offering broad spectrum of shared services in Finance and Accounting (FAO) and Human Resource (HRO), and Consulting. Mynd has successfully created a unique space for itself by delivering specialized service offerings tailored for specific business and industry needs. We offer our platform as SaaS (Software as a Service) which complements the services delivered, to suit customers’ need across the globe. Mynd commenced operations in 2002 in India, with international presence today in Asia, Africa, Middle East, US and Europe. The company’s global reach is further supported by a robust partner network spread across 60+ countries for addressing specific customer requirements.

About India Opportunities Fund:

India Opportunities Fund is a sector agnostic pan-India fund focused mainly on growth capital needs of India’s growing and unlisted MSMEs operating in emerging sectors such as light engineering, clean-tech, agro-based industries, logistics, infrastructure, educational services, IT/ITES etc. The contributors to the Rs 421+ crore fund includes leading Indian Public Sector Banks and Insurance Companies