Drip Capital, a leading cross-border trade finance fintech, has developed a data-driven tool to facilitate access to credit enabling MSMEs to grow and compete globally.

Traditional credit assessment methods often relied on rigid criteria, such as personal guarantees, guarantees and lengthy paperwork, which many small businesses could not meet.

Pushkar Mukewar, co-founder and CEO of Drip Capital, said that by going beyond traditional credit scoring models, the company has enabled MSMEs to access working capital to be competitive on a global scale and eliminate the barriers that have held them back for too long.

“We believe that technology and data have the power to change the game,” he added.

According to the Ministry of MSME, the SME finance sector is vital for global economic growth, especially in emerging markets like India, where SMEs account for 45 percent of the country’s exports.

Non-traditional credit assessment tools, powered by data and technology, are a game-changer for MSME exporters, opening doors once firmly closed, he added.

Non-traditional credit models assess creditworthiness using alternative data such as business transaction history, insurance data and cash flow, rather than relying solely on collateral or credit ratings. credit. AI and machine learning have enabled faster and more accurate decision-making, providing MSMEs with flexible financing and thereby reducing trade barriers through faster and more flexible access to financing.

For example, Drip Capital had provided financing to a textile exporter on its unpaid invoices. Rapid access to capital allows cross-border business enterprises to expand their operations, hire more employees and ultimately expand their customer base while maintaining healthy cash flow and smooth running of their operations, he said. -he declared.

“As more fintech companies adopt these innovative tools, MSMEs around the world will likely benefit from the financial support they need to thrive. This trend will bring greater inclusiveness by funding a wide range of businesses, including women-led businesses and those located in underserved regions,” he said.

As blockchain and other technologies emerge, they will further improve the transparency, security and speed of cross-border transactions.

For MSMEs, the rise of non-traditional credit assessment tools appears to be an opportunity. By removing long-standing barriers to financing, these innovations open new avenues for growth, allowing small businesses to expand their reach and ultimately contribute more to the economy.