Power2SME ties up with Vistaar to finance SME clients

In the first stage of a pilot, the clients of the 'buying club' will get a credit limit of up to Rs 25 lakh from the NBFC

Power2SME, touted India’s first ‘buying club’ for small and medium enterprises (SMEs), has tied up with Vistaar Financial Services, a Bengaluru-based non-banking finance company (NBFC), to fund its SME clients’ procurement transactions.

A pilot project is already underway with SME clients from Pune and Nashik in the manufacturing sector. In the first stage of the pilot, NBFC funding would be up to a credit limit of Rs 25 lakh, Power2SME said in a statement on Monday.

Power2SME, which buys material like inks, chemicals, additives, polymers, textiles, steel, paints, cement, wood and electricals from principal manufacturers, and then sells those directly to its registered user base of 30,000 SMEs at competitive rates, said raw material costs for manufacturing SMEs amounted to about 80 per cent of their recurring cost.

The company said it was able to increase SME profit margins by three per cent to five per cent a month by providing raw materials to SMEs at competitive price points.