With an objective to reinvent supply chain finance across India by enhancing security, transparency and operational processes, Mahindra has announced the development of a blockchain solution. This blockchain tech can help Mahindra Finance to access transactions recorded on a shared ledger in near real-time, enabling it to develop and offer new products to small and mid-sized enterprises.
This cloud-based application is one of the first projects of its kind in India outside of traditional banking, is designed to transform supplier-to-manufacturer trade finance transactions through a allowed distributed ledger. It will enable all parties involved in the transaction to act on the same shared ledger, with each party updating only their part of the process, ensuring efficiency, consistency, trust, and transparency while safeguarding sensitive information.
One of the major sources of working capital finance for many suppliers is Invoice discounting. It is the process of bundling and selling invoices at a discount. It is said to be to be difficult, slow and risky, requiring each party to maintain and manually update separate ledgers. With the help of the new solution, more suppliers will be able to access credit that in turn will drive more financial inclusion throughout the supply chain. The inefficiency caused by human errors during this process will be regulated.
As for IBM’s part, the company is actively expanding its blockchain consulting services and capabilities and working with clients to understand what it takes to make Blockchain ready for business. Developers can easily and quickly develop applications while testing security, availability and performance of an allowed blockchain network through IBM’s open source contributions to the Hyperledger Fabric and its blockchain services on IBM Bluemix cloud.
IBM is committed to advancing the science of blockchain, helping to remove complexity, and making it more accessible and open. Financial services, supply chains, trade finance and logistics, IoT, risk management, digital rights management and healthcare are some of the areas that are poised for dramatic change using blockchain networks.
On the occasion, Anish Shah, Group President (Strategy), Mahindra Group expressed the Mahindra Group is pioneering the use of blockchain to disrupt its traditional businesses and drive future growth. They are actively looking at other applications across the Group in financial services, auto, mobility, and agritech. He further added that it proof of concept represents a significant step forward in making blockchain, still a new technology, a more compelling and efficient supply chain solution for Mahindra Finance’s small and mid-sized enterprises loans business. Working with IBM, they will work to build, test, scale and refine this solution over time.
Speaking of the same, Lula Mohanty, Managing Partner of IBM Global Business Services, IBM ISA said that Blockchain is poised to revolutionize business like the Internet did, and IBM is at the forefront of the revolution. They offer a comprehensive enterprise-class blockchain solution that is secure, scalable and reliable. The work with Mahindra has the potential to fundamentally transform the way businesses interact with one another and their customers and suppliers, and the company is confident that this engagement can be replicated not just in the finance industry but across other sectors as well.