RBI certifies fintech led 121 Finance as India’s first NBFC-Factor, after revised Registration of Factors Regulations (2022)

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Dr Ravi Modani, Founder and CEO, 121 Finance

Key Highlights:

· The recognition comes after the revised factoring regulations announced by the RBI under the revised Registration of Factors Regulations (2022)

· Aims to deliver the Trade Receivables Discounting System (TReDS) experience for seamless Working Capital solutions to MSMEs

· 121 Finance is strongly placed to reach annual disbursements of over Rs. 500 crores by 2023

Mumbai (Maharashtra) [India], April 16: 121 Finance becomes India’s first fintech-led NBFC-Factor to receive the Certificate of Registration under Registration of Factors (Reserve Bank) Regulations, 2022. The NBFC-Factor addresses the most significant challenge most businesses suffer from, i.e., arranging short-term funds for MSMEs, without any collateral.

Until now, Factoring was offered only to the large corporates; however, 121 Finance has brought factoring to the Micro, Small, and Medium Enterprises (MSMEs) and has its roots ground deep in FinTech. MSMEs are actively seeking alternate sources of Working Capital, especially since the banks are moving out of cash credit limits for small businesses.

Dr Ravi Modani, Founder & CEO of 121 Finance is passionate about bringing the digital factoring experience to MSMEs. “Digital Factoring is the simplest, fastest, effectively lowest cost solution for Working Capital for any business, more so for MSMEs. With financial technologies and registration as an NBFC-Factor in place, we are strongly placed to reach annual disbursements of over Rs 500 crores by 2023. 121 Finance has been a pioneer in Digital B2B lending through Government eMarketplace (GeM Sahay), offering Sachet Loans or small ticket sized loans and now aims to deliver the Trade Receivables Discounting System (TReDS) experience for seamless Working Capital solutions to MSMEs,” says Dr. Modani.

121 Finance is versatile to handle the smallest of invoices and high volumes, with end-to-end digital processes. Through Gem Sahay, 121 Finance has been able to deliver a solution to a borrower via a Do It Yourself (DIY) model wherein borrowers can apply for a loan 24×7 by themselves. Using financial technologies and integrations on GeM Sahay, 121 Finance has been able to finance invoices as small as Rs 160.

Regarding changes post the new factoring regulations by RBI in 2022, Dr Modani believes that the recent developments in e-invoicing coupled with Digital Factoring will disrupt the entire transaction-based lending in the country which will eventually help in mitigating a lot of risk in lending. “Revised Factoring regulations will also see a huge opportunity in the FinTech B2B lending space, with extremely competitive offerings. This will also give a lot of options to the businesses to choose from. With bigger NBFCs in play, the awareness of Factoring will increase amongst users, which will lead to the growth of the small business across the country,” adds Dr Modani.

121 Finance is currently working on offering invoice verification using Blockchain technology and is developing algorithms using Artificial Intelligence (AI) and Machine Learning (ML) to enhance its credit coverage geographically. To reduce turnaround times, the company is also developing integrations with Enterprise Resource Planning (ERP) software tools including Tally, to offer convenience to borrowers in the Factoring and Working Capital Finance space. “Our vision is for any business in India is to be able to sell on credit and 121 Finance being able to manage the receivable and offer cash to the seller leveraging the latest financial technologies and make India the flagbearer in Digital Factoring,” says Dr. Ravi Modani.

Jaipur-based 121 Finance is India’s first fintech led NBFC-Factor to receive the Certificate of Registration under RBI’s revised Registration of Factors Regulations (2022). A Digital Factoring company, on a mission to bring factoring, that was only available to corporates so far, to the MSMEs and especially support small ticket size trade to grow. Using financial technologies as leverage, the company is bringing disruptive upgrades to the world of Working Capital Finance with Factoring – collateral-free finance, Embedded Finance, Co-lending, and other customized short-term offerings. Headed by Dr Ravi Modani, Ph.D. in Working Capital Management, 121 Finance is focused on delivering Working Capital loans backed by the knowledge and understanding of its core team in its third-generation legacy in business, finance, and technology.