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How Myforexeye helps MSMEs from facing up to 80-90% loss in forex transactions


MSMEs depend on banks to execute cross-border transactions and are often forced to pay the high transaction fees the lenders charge. The enterprises also lose out on a window to capitalise on the arbitrage opportunity in the forex market.

As a banker, Anand Tandon had a ringside seat to these deals. After observing these for a few years, he realised there was a gap — and a lucrative opportunity — in this space. That encouraged him to set up Myforexeye in 2014 as a forex technology platform offering transparency, real-time information and ease of forex transactions at a low cost.

The primary purpose of the company is to make such transactions transparent to help save exporters and importers from forex losses. “We make foreign exchange transactions free from possible manipulation by forex mediators. In the course of my work, I observed clients had to forgo up to 1% of the transaction value because of inaccessible forex rates and non-negotiable bank charges. There was no way that clients could check the real-time rates in the absence of forex terminals, which are expensive to buy. I thought of creating a product that could make forex rates accessible to small traders without burning a hole in their pockets,” explains the former banker.

Later, Ritesh Victor and Priyetu Shekhar joined him as co-founders to bolster the company’s services. While Victor has over 20 years of experience in forex markets, derivatives and technical analysis, Shekhar holds more than 18 years of experience in the forex sphere and working capital management. Together, they have tried to shape Myforexeye as a friend of small businesses.

Tandon illustrates his point by giving an example of a businessman wanting to exchange currency. “He goes to a money exchanger or a bank for the purpose and exchanges his money at the rate shared by the bank and pays the service fee. Few people know that the exchange rates shown to them are not the actual market rates. They are either increased or reduced based on which currency they are buying. The service fee too can be negotiated. Transacting by usual means, the person exchanging the currency loses 0.5-1% of his money,” he says.

While the loss is not much if the individual exchanges a few thousand to a few lakhs of rupees, it can be manifold if the transaction is of a higher amount. This is where Myforexeye comes in by enabling customers, especially MSMEs, to view real-time exchange rates on a mobile application. “It helps customers save up to 80-90% of the money they would have lost otherwise. These rates are sourced from the same data terminals that are used by banks,” says the 45-year-old entrepreneur.

Myforexeye-Fintech-founders

Myforexeye co-founders Ritesh Victor, Anand Tandon and Priyetu Shekhar.

The company also helps clients in negotiating with banks for a lower rate of commissions and charges. So far, it has worked with over 4,500 customers, facilitating transactions worth $11 billion and helping customers save over $160 million. Myforexeye has a revenue of a little over $1 million and the co-founders expect it to go to $5 million in two years. MSME exporters contribute 40% to Myforexeye’s business and the remaining comes from forex traders, importers and HNIs. Consulting services such as forex risk hedging, interest subvention, export bill discounting and forex audit are among the other offerings that MSMEs use on this platform.

The company saw forex trading and forex advisory services pick up in a big way during the pandemic. “MSMEs were in a big fix, with rupee depreciating from 70 to 76, leaving both importers and exporters high and dry. While importers lost on account of currency depreciation, exporters bore the brunt of order cancellations and delayed shipments induced by supply chain disruptions. The biggest of our clients were affected,” he says.

The company now plans to scale up their operations in two years. Currently, 70% of the revenue comes from consulting business, while 30% is via app subscription. “We have created a road map to increase the revenue from subscriptions to 70%. For this, we are investing all our collective energies in increasing the number of users of our app from 10,000 to 1 lakh by March 2022. This will enable us to grow exponentially,” he says.

On the anvil are plans to tie up with industry bodies such as the Federation of Indian Export Organisations and Assocham to support members in saving money on forex transactions; conducting roadshows and awareness drives to connect with more MSMEs and also to educate small businesspersons about saving their hard-earned money. “The same money can be used for productive purposes like meeting the working capital needs. It can lead to making the entire MSME financial ecosystem more efficient,” he adds.

(
Edited by Ram Mohan)

(The one-stop destination for MSME, ET RISE provides news, views and analysis around GST, Exports, Funding, Policy and small business management.)

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