IBM is working with India’s Mahindra Group on a new blockchain-based solution to improve operational processes for the bundling and selling of invoices as they look to transform supply chain finance across the country. Known as invoice discounting, the process is traditionally known for being time-consuming and risky, requiring each party in the ecosystem to maintain and manually update separate ledgers. The new blockchain solutions intends to streamline that process, make it easier for suppliers to access credit, and open up the market to new participants and new products. It promises to enhance security, transparency and operational processes. “This 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,” said Anish Shah, group president of strategy at the Mahindra Group. “Working with IBM, we will work to build, test, scale and refine this solution over time.” Shah added that alongside supply chain finance, the firm is also looking at other applications of blockchain technology in areas that include financial services, auto, mobility and agritech. The Mahindra Group, one of the largest diversified multinational group of companies based in India, operates in numerous industries including information technology, financial services, aerospace, consulting services, defense, energy, industrial equipment, logistics, real estate and retail. Mahindra & Mahindra Financial Services Ltd., one of the group’s subsidiaries, is looking to develop and offer new products to small and medium-sized enterprises that leverage blockchain technology. Distributed ledgers represent a technology shift that has the potential to drive business growth, the company said. The new solution, a cloud-based application and one of the first projects of its kind in India outside of traditional banking, will be designed to reinvent supplier-to-manufacturer trade finance transactions through a permissioned 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. Commenting on the announcement, Lula Mohanty, managing partner of IBM Global Business Services at IBM ISA, said: “The work with Mahindra has the potential to fundamentally transform the way businesses interact with one another and their customers and suppliers, and we’re confident that this engagement can be replicated not just in the finance industry but across other sectors as well.”
IBM has partnered with blockchain’s Mahindra Group to develop a India-based technology to streamline the invoice discounting process across the country. Following a successful proof of concept, the development aims to facilitate suppliers accessing credit and make the market available to new participants and products while improving security and transparency.