The Mahindra Group, an India-based multinational group of companies, is working with IBM to develop a blockchain solution that has the potential to reinvent supply chain finance across India by improving security, transparency and operational processes.

One of the first projects of its kind in India, the application is cloud-based and is designed to transform 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.

One of the major sources of working capital finance for suppliers is invoice discounting – the process of bundling and selling invoices at a discount. Supplier-to-manufacturer invoice discounting processes are considered to be difficult, slow and risky, requiring each party to maintain and manually update separate ledgers giving rise to the risk of human error. The new solution aims to enable more suppliers to access credit, with the goal of driving more financial inclusion throughout the supply chain.

Using blockchain technology, Mahindra Finance would be able to access transactions recorded on a shared ledger in near real-time, enabling it to develop and offer new products to small and mid-sized enterprises.

"The Mahindra Group is pioneering the use of blockchain to disrupt its traditional businesses and drive future growth. We are actively looking at other applications across the Group in financial services, auto, mobility and agritech," said Anish Shah, Group President (Strategy), Mahindra Group. "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. Working with IBM, we will work to build, test, scale and refine this solution over time."

IBM is rapidly expanding its blockchain consulting services and capabilities and actively working with clients to understand what it takes to make blockchain ready for business. Through its open source contributions to the Hyperledger Fabric and its blockchain services on IBM Bluemix cloud, developers can easily and quickly develop applications while testing security, availability and performance of a permissioned blockchain network.

"Blockchain is poised to revolutionize business like the Internet did, and IBM is at the forefront of the revolution. We offer a comprehensive enterprise-class blockchain solution that is secure, scalable and reliable. 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," said Lula Mohanty, Managing Partner of IBM Global Business Services, IBM ISA.