The platform has served over 2,000 SMEs from both Telugu states. For the last financial year, the loan book of Modifi India stood at $25 crore

Berlin-headquartered fintech startup, Modifi on Tuesday said it has set a target to disburse $50 crore in trade finance to SMEs in Telangana and Andhra Pradesh over the next two to three years. The startup also plans to expand its physical presence in India by opening an office in Hyderabad by end of 2024.

From 2019, Modifi has financed $1.5 billion trade of SMEs in India, out of which 15 per cent of the business share has been contributed by SMEs from Telangana and Andhra Pradesh. The platform has served over 2,000 SMEs from these Telugu two states. For the last financial year, the loan book of Modifi India stood at $25 crore. Globally, the startup has financed trade of companies, SMEs across 55 countries up to the tune of $2.5 billion.

Sachin Nigam, Country Head, Modifi India, said: “Telangana and Andhra Pradesh are one of our important markets. Our target is to finance SMEs in these States with $50 crore over the next two to three years. We will also be adding an office in Hyderabad in the next six to nine months. As our operations are completely digital we will begin with employing five to eight people. Though we are sector agnostic, the focus sectors which we have majorly served here includes pharma, chemical, solar, electricals, electronics, and engineering.”

Modifi has a workforce of over 100, with more than 50 per cent placed in India offices at Mumbai and New Delhi. The finance solution provider for exports and imports holds NBFC license in Europe and operates under RBI guidelines in India. They lend credit in USD, Pounds and Euro. The average ticket size is close to $2 million. Through trade credit insurance the startup covers its B2B cross-border financing. From the time of inception, it has witnessed less than 0.001 per cent of NPA (non-performing asset).

On raising debt to further meet their target of loan book, Nigam said, “I am not in a position to answer that as the call is taken at the headquarters. What I can say is that we have strong institutional investors. Our business model does not involve burning too much cash, so there is no need to raise capital at all point of time. Our business is efficient as loss ratio is minimal and we generate enough cash to be self sustainable.” The startup had raised $24 million in Series B, 18 to 24 months back, besides the $100 million from HSBC Innovation Banking UK, and an undisclosed debt facility of $75 million.

Depending upon commodity traded, and other factors, Modifi charges a fee of about nine to 12 per cent.