A group of 11 Indian banks have teamed together to unveil the nation’s first blockchain-linked funding for SMEs.
According to the Economic Times, the participants include ICICI, Axis, HDFC, Kotak Mahindra, Yes Bank, Standard Chartered, RBL, South Indian Bank, IndusInd Bank, State Bank of India and Bank of Baroda.
The meetings among the participating banks are being organised by a consortium called the Blockchain Infrastructure Company (BIC).
The goal is to revamp lending for “default-prone small firms”. The banks have been working together to set up a live network that cuts time in supply-chain financing.
“The idea of having such an organisation is to remove any communication hurdle among the different banks,” explains Abhijeet Singh, head of business technology at ICICI Bank. “A blockchain network can only thrive if the entire ecosystem is working in synergy through a single network. The core objective of having such a ledger network is to ensure transparency in credit disbursement, especially in the underbanked section.”
The blockchain network will allow the banks to access public credit data so they can reduce risks when offering lending.
The first phase will see the live network set up, thus allowing registration and the digitisation of records.
On a broader level, and earlier this month, Satchit Hasabnis, co-founder of Loanbaba, looked at initiatives by India’s government to boost fintech.