Concentrix - Innovation in Technology Management, Planning & Implementation

Name of Organization / Company: Concentrix, Tempe, AZ USA
Category: Innovation in Technology Management, Planning & Implementation

Entry Title: Factorin™ Solution Enables Small Businesses with Working Capital

Essay

Background

Small businesses struggle with working capital, in part due to longer payment cycles from their decreased negotiating power.

Concentrix saw an opportunity to bridge this gap and developed Factorin™, an industry-leading financial software platform providing financial institutions the ability to support their small businesses through an invoice marketplace. Factorin™ is an open platform for any financial banking institution to provide a trade receivables auction.

India Case Study

Micro, small and medium businesses comprise more than 30% of India’s GDP, 45% of the country’s exports and employ more than 100 million people. Yet, these smaller businesses struggle to obtain credit and loans from formal financial institutions and must rely on informal moneylenders charging interest rates up to 25%. This working capital forms a significant part of their debt (67%).

Concentrix worked with one of India’s leading private sector lenders and their partner, one of India’s largest B2B e-commerce companies, to create a digital invoice discounting trade receivable system using our award-winning solution, Factorin™. To date, this client has throughput of $275 million in invoices and is still growing in 18 months.

This factoring marketplace solution changed the receivable financing business process in India. The platform built by Concentrix using Factorin™ solution is the most prominent platform in the market and it’s integrated with National Payments Corporation of India to process settlements.

Benefits for All Parties

The Small Business (seller): Sellers receive funds in less than 48 hours of the invoice being posted on the platform. Sellers assume no obligation in the event of a default by the buyer. Transparent bidding process enables efficient price discovery, ensuring lower cost of funds. Sellers have no repayment obligation for the funds received.

Corporate Buyers: The platform settles all transactions seamlessly, so buyers don’t need to manage multiple vendor payments. Quick payments to sellers provide buyers more control over procurement. Invoices can be uploaded individually or in bulk. The system is integrated with buyers’ ERP systems, reducing turnaround time and eliminating manual processing errors. Flexible payment terms lead to better working capital management for buyers.

Lender/Banks: Funds disbursed via the platform qualify for priority sector lending. Real time data feeds on the credit rating of the buyers helps financiers in their credit evaluations. Automated processes reduce the cost of customer acquisition for the lenders.

Finance Client of Factorin: Receives a commission from lenders, buyers, sellers. Features and Facts

• More than $20 billion invoices processed by Factorin™.
• More than 10,000 corporate customers onboarded, and data processed.
• Suppliers, buyers and financiers enter into agreements with the platform rather than with each other.
• An invoice auction process keeps interest rates competitive.
• Buyers can keep credit cycles intact or extend them without classifying the extension as a loan. This positively impacts cash flows without affecting leverage.
• Basing loans on invoices reduces the risk of fraudulent borrowing.
• Uses block chain for fraud detection and prevention of double financing.
• Multiple channels enable seamless communication between exchanges, corporate ERP systems and financers.
• Mobile platform available on iOS and Android
• Recently received industry awards from Banking Frontiers for innovation in banking industry for the platform.

LINKS:

URL 1: https://www.youtube.com/watch?v=Mp3m-v3xNas

URL 2: www.concentrix.com