Working capital for agents
Indifi Technologies, an enabler for SME funding in India, allies with Travel Boutique Online, in a bid to ease travel agents’ working capital constraints.
Through this association, Indifi will provide working capital to the travel agents, who are unable to scale their businesses due to financial limitations. This mutually benefitting alliance provides travel agents with the right amount of finances, supporting them to conduct more business. Furthermore, a proper transaction behavior will help Indifi make a superior assessment of the travel agents' business, thereby allowing lenders to make informed credit decisions.
Adding insights to the association, Ankush Nijhawan, Co-founder and CEO, Travel Boutique Online, commented, “While airlines have moved to a weekly payment settlement cycle, corporate customers continue to work on credit with travel agents, thereby creating a working capital gap for travel agents. Our partnership with Indifi allows us to bring a solution for our travel agent network".
Commenting on the partnership, Alok Mittal, Cofounder and CEO, Indifi Technologies said,“Although the last few years have witnessed a significant amount of investment in startups and SMEs in India, many investors and lenders have not been able to provide working capital solutionsdue to lack of credible data. By bringing in the transaction behavior of travel agents, we enable lenders to effectively address this segment"
Putting things in perspective, the settlement cycle for travel agents, i.e. the time within which travel agents are required to pay to airlines after booking tickets, has been shrinking with time. Currently, it is 7 days for scheduled airlines, whereas low cost carriers charge at the time of booking itself. On the contrary, corporate customers generally takes 30-45 days to pay travel agents for the tickets booked. This creates a working capital gap, which limits the travel agency's ability to grow. More than 50 travel agency partners have benefitted from the platform.
The association is meant to counter these shortcomings of the industry. Furthermore, in terms of credit assessment, a reliable analysis of the travel agent's earnings has never been factored in credit decision making process. However, this association will allow a proper analysis of the earnings of the agents to make a comprehensive credit decision.