Vayana Network, a trade finance platform, aims for a net revenue of about $100 million by FY28 through expansion in Southeast Asia and other regions with strong business ties to India, said its Chief Financial Officer (CFO) Vinod Parmar. The CFO emphasized that Vayana Network is set to continue its trajectory of innovation and growth, significantly impacting India’s financial ecosystem.
“Our focus will be on expanding in Southeast Asia and other regions with strong business ties to India,” Parmar told ETCFO. “With a robust strategy and a clear vision, Vayana Network is poised to continue its trajectory of innovation and growth, making a significant impact on India’s financial ecosystem,” he added.
Bridging Financial Gaps in India’s Evolving Economy
CFO Perspective on India’s Banking Evolution
“India has transitioned from being an averagely banked country to a well-banked one, thanks to the digital evolution that has expanded access to banking for a broader population,” began Vinod Parmar. Despite this progress, he highlighted that many businesses, especially MSMEs, still face significant challenges in accessing affordable finance. This gap in financial access is precisely where Vayana Network steps in.
The Scope of the Challenge
With around 63 to 70 million MSMEs in India, depending on the report, the challenge is massive. “Unless you are a well-established, possibly rated entity, access to finance is always less than what you need to grow your business,” explained Parmar. The primary focus for Vayana since its inception in 2016-17 has been to address these challenges.
Understanding the Market
“Today, roughly about $120 billion worth of trade happens monthly between B2B players in the country,” shared Parmar. This enormous figure underscores the substantial trade credit gap that exists. Despite numerous large banks and NBFCs addressing this, only about $45 to $48 billion of this trade is covered through formal channels, leaving a significant portion unmet.
Vayana’s Approach
Derived from the Sanskrit term ‘vayan’ meaning weaving, Vayana Network aims to weave together a network of large lending institutions, corporates, and MSMEs. “Our goal is to benefit the MSMEs, ensuring that neither corporates nor banks face disruptions in their operations,” emphasized Parmar. This is achieved through a blend of technology platforms, data and analytics solutions, and strategic partnerships.
Innovations
1. Payment Aggregation Platform: Licensed by the RBI, this platform facilitates seamless transactions.
2. Cross-Border Trade Finance Platform: Launched last year, this platform is the world’s first regulatory licensed cross-border trade finance platform, enabling smaller exporters and importers to access both INR and foreign currency credit.
Financial Metrics and Strategic Partnerships
Financial Performance
“Our journey started in 2017, and annually, we are facilitating about $15 billion worth of financing throughput, all funded by our partner institutions,” stated Parmar. Over the years, Vayana has facilitated approximately $200 lakh crore in financing, showcasing their significant impact.
Key Investors and Funding Rounds
Vayana’s growth has been supported by key venture funds like Chirate Ventures and Jungle Ventures, and later by global multilateral institutions like IFC (part of the World Bank) and British International Investments. These investments have been crucial in driving Vayana’s technology advancements and expansion.
Market Share
“One out of eight or nine GST returns filed in the country today goes through our platform. Additionally, one out of five e-invoices generated daily in India is processed through Vayana,” proudly shared Parmar, underscoring their substantial market share.
The Role of a CFO in Driving Growth
Reflecting on his role as CFO, Vinod Parmar shared his transition from traditional banking to Vayana. “Initially, my focus was on building core businesses, platforms, and partnerships. Now, we have a lead in all segments,” he said. Emphasizing the 4 C’s—Cashflow, Credit, Compliance, and Commerce—Parmar explained how Vayana addresses these critical areas for businesses.
Expanding Responsibilities
Beyond financial management, Parmar focuses on audit, taxation, and compliance to instill discipline and create opportunities for capital raising and financial planning. “Advanced business planning, periodic reviews, and ensuring we meet the expectations of our board and partners are as critical as managing financial health,” he explained.
