Part 04 — Digital & Embedded Lending

B2B Commerce & Procurement Finance

B2B commerce credit is buy-side working-capital finance embedded in a procurement flow. A small or medium enterprise (SME) is trying to buy steel, polymers, chemicals, agri inputs, cement, packaging or other industrial goods; the platform sees the quotation, supplier, goods, delivery cycle and payment need; the lender funds the purchase instead of giving a general cash loan. In the best version, the borrower receives goods, the supplier receives money, and the lender can tie the loan to a real trade transaction.

This is the buy-side counterpart to Marketplace Seller Finance. Seller finance starts from a marketplace seller’s sales and settlements. Procurement finance starts from the buyer’s input purchase and production cycle.

What The Model Is

The model is commerce-first credit. The platform is not only a loan lead source; it owns or observes procurement. OfBusiness describes itself as a B2B raw-material procurement and credit platform, with categories including steel, non-ferrous metals, polymers, chemicals, energy, construction, agri and apparel, and says its group adds value through raw-material supply and access to credit (OfBusiness). Oxyzo, the group non-banking financial company (NBFC), publishes purchase finance where the lender pays the supplier directly against supplier invoices, with indicative 60-120 day credit terms, interest from 12% p.a., processing fees from 1%, and unsecured limits up to ₹5 crore for eligible borrowers (Oxyzo purchase finance).

The underwriting question is not just “can this business repay a loan?” It is “does this business repeatedly buy inputs, convert them to invoices, and collect on a predictable cycle?” Procurement credit therefore sits between traditional working capital, supply-chain finance and embedded lending.

OfBusiness And Oxyzo Anatomy

OfBusiness is the procurement marketplace and operating system. It aggregates raw materials, gives quotations and price intelligence, and handles sourcing and fulfilment. Oxyzo is the regulated lending arm. Oxyzo’s public investor page identifies it as OXYZO Financial Services Limited with RBI NBFC registration number N-14.03380 and carries audited financial statements and annual reports (Oxyzo investor relations).

The reference transaction is simple:

The SME identifies a raw-material requirement or purchase order-backed procurement need.
The platform or lender validates borrower KYC, GST, banking, vendor credentials and order quality.
A revolving or transaction-specific credit line is sanctioned.
On drawdown, money is paid directly to the supplier or vendor, not released as unrestricted cash.
The SME receives goods, manufactures/trades, invoices its buyer, and repays in a short tenor.

Oxyzo’s current public pages verify direct supplier payment, invoice-triggered drawdowns, revolving use across multiple suppliers, and indicative 60-120 day repayment. They also say secured and unsecured variants exist. Current public pages do not verify post-dated cheque, personal guarantee or hypothecation terms for every borrower, so those should be treated as facility-specific and unverified unless seen in the signed loan documents. An older OfBusiness-hosted ET Prime reproduction mentions cheque monitoring and raw-material-only financing, but it is a 2019 operating snapshot, not a current product disclosure (OfBusiness ET Prime reproduction).

CRISIL’s May 11, 2026 rating rationale says Oxyzo began lending in November 2017 by providing secured and unsecured purchase-finance loans to SMEs for raw-material purchases, and now also provides long-term SME finance. It reported assets under management (AUM) of ₹8,427 crore at March 31, 2025 and ₹9,707 crore at December 31, 2025. Gross non-performing assets (GNPA) were 0.9% at March 2025 and 1.0% at December 2025. Consolidated profit after tax was ₹339 crore in fiscal 2025, with return on managed assets (ROMA) of 4.1%; for the first nine months of fiscal 2026, PAT was ₹266 crore and ROMA was 3.5% (CRISIL, May 2026). I did not find a current public net interest margin (NIM) disclosure in the reviewed sources, so NIM should not be inferred.

Credit Mechanics

Transaction-Tethered Credit

Disbursal is tied to a purchase event. Oxyzo’s own explanation says it pays the supplier directly and that the borrower repays after the procurement-to-collection cycle. That reduces end-use diversion because the borrower cannot easily use the drawdown for unrelated expenses. It also creates clean fund-flow evidence: supplier invoice, lender payment, goods receipt, borrower invoice and repayment.

Procurement-Ledger Underwriting

The procurement ledger is a credit file hiding in plain sight. Repeat purchase cadence, order size, seasonality, commodity price exposure, supplier concentration, buyer concentration, delivery performance and margin movement all become underwriting variables. A fabricator buying steel every 30 days against known buyer orders is different from a trader making one speculative bulk purchase after a price spike.

Goods And Receivables As Quasi-Collateral

In unsecured purchase finance, there may be no property collateral. That does not mean the lender is blind. The goods financed, receivable expected from onward sale, GST trail, e-way bill trail, bank credits and supply relationship create recovery handles. They are weaker than registered mortgage collateral but stronger than a generic cash loan with no end-use visibility.

Supply Cutoff As A Collection Lever

Because the commerce platform is also a procurement channel, repayment behaviour can affect future supply or future credit access. This is not a substitute for lawful collections, but it is a real behavioural lever: a borrower that defaults may lose preferred pricing, credit limits, supplier payment speed or fulfilment priority. Controls should ensure cutoff decisions are contractual, transparent and not coercive.

Sector Cyclicality And Concentration

This model often concentrates in manufacturing, infrastructure, construction and commodity-linked sectors. Steel, cement, chemicals and agri-input cycles can move sharply. A lender can look excellent during an infrastructure upcycle and weaker when commodity prices fall, receivables stretch or government-contract payments slow. Portfolio limits by commodity, geography, buyer segment and tenor matter.

When the marketplace and lender share a group, the credit policy must separate commerce growth incentives from lending discipline. The system should prove that the NBFC made a regulated credit decision, priced risk independently, disclosed the lender and costs, and did not use credit to hide weak commerce receivables or push uneconomic sales. Related-party transactions and exposure to group-originated flows should be board-monitored and auditable.

Category Sweep

Platform	Commerce flow owned or observed	Credit product	Balance sheet	Verified nuance
OfBusiness/Oxyzo	Raw-material procurement across industrial supply chains	Purchase finance, invoice discounting, vendor finance, work-order finance	Oxyzo NBFC, plus public references to lender/co-lending partnerships without a verified current split	Direct supplier payment and 60-120 day procurement tenor are verified; off-book share is not publicly verified.
Moglix/Credlix	Enterprise procurement and supplier/export supply chains	Invoice discounting, PO finance, export factoring, anchor early-payment, channel finance	Credlix says it is a platform with bank/NBFC network; enterprise FAQ says 2 NBFCs and 3 banks on platform	Strongest in supplier/export finance, not only buyer checkout credit (Credlix enterprise).
Udaan/udaanCapital	B2B marketplace orders for retailers and distributors	Trade credit/deferred payment and invoice-based supplier payment	udaan terms show HEPL trade credit; public reports also mention lender partners such as Northern Arc	Security via undated cheques is in current trade-credit terms; exact lender share for each facility is not public (Udaan trade credit terms).
Solv, now Jumbotail-owned	B2B commerce for MSMEs and kiranas	BNPL, invoice finance, business loans, anchor-led dealer finance	Wide bank/NBFC partner network, according to Solv and SC Ventures	Solv was acquired by Jumbotail in 2025 after CCI approval, creating a larger B2B commerce and fintech platform (SC Ventures).
Bizongo	Vendor digitization and procurement-to-pay visibility	Supply-chain finance, factoring, business loans, capex loans	Network of financial institutions; BizongoFin says applications can go to 30+ institutions	Transaction score and vendor digitization are the hook, not owned lending balance sheet (Bizongo).
Jumbotail	Food and grocery B2B marketplace and kirana retail OS	Working-capital credit access for customers and sellers	Lending partners	Public pages verify access to working-capital credit from partners, but not current product pricing (Jumbotail).
ElasticRun	Rural fulfilment/distribution network for brands and kiranas	Working-capital against purchases, verified from partner pages, not ElasticRun’s current own site	Cashkumar P2P page claimed ElasticRun-linked invoice/purchase funding	Treat lending details as partner-claimed, not ElasticRun-verified, unless contracted documents are available (ElasticRun, Cashkumar partner page).
Infra.Market	Construction-material procurement and retail distribution	Financing is reported by secondary sources, but I did not find a current primary credit product page	Not verified	Include as commerce-adjacent only; credit product and lender structure are unverified.
Zetwerk	Contract manufacturing and supplier network	Supplier working-capital product intent appears in a public job listing	Not verified	Current credit product is not publicly verified; CRISIL instead highlights supplier advances as a working-capital risk (CRISIL Zetwerk, May 2026).

The older anchor-finance pattern predates all of these platforms. A manufacturer, FMCG company or construction-material anchor introduces its dealers and suppliers to a bank or NBFC. The anchor provides invoices, payment files, dealer lists, scheme data or stock movement. The lender funds dealers or vendors, and the anchor gets higher throughput and more disciplined channel payments.

Economics Of The Flywheel

The flywheel has two margins. Commerce earns a trading, fulfilment or platform margin. Credit earns interest, fees and sometimes servicing income. Customer acquisition cost (CAC) for credit can be near zero when the borrower is already using the procurement platform, but that does not make credit risk zero. It only means distribution is cheaper and data is richer.

Oxyzo’s published economics show why the model is attractive. CRISIL reported FY25 total income of ₹1,211 crore, PAT of ₹339 crore, AUM of ₹8,427 crore and ROMA of 4.1%. In the first nine months of FY26, AUM rose to ₹9,707 crore, with GNPA at 1.0%. These are strong NBFC metrics, but they are not pure procurement-finance metrics because Oxyzo’s book now includes SME, financial-institution, micro-enterprise and retail partnership exposures.

Risks And Controls

The first risk is end-use drift. Control it with direct supplier payment, approved vendor pools, invoice matching and goods-receipt confirmation. The second is fake or circular trade. Control it with GST reconciliation, e-way bills, supplier validation, related-party checks and bank-statement tracing. The third is commodity risk. Control it with shorter tenors, lower advance rates in volatile commodities and sector concentration caps.

The fourth risk is related-party pressure. The lender should maintain independent underwriting, maker-checker approval, exposure limits for marketplace-originated customers, board reporting and audit trails. The fifth is collection over-reliance on platform leverage. A supply cutoff helps, but the lender still needs NACH, guarantees where applicable, legal documentation, receivable security where used and bureau reporting.

Regulatory Perimeter

The lender is still governed by NBFC prudential, conduct, KYC, fair-practices, credit-information and outsourcing rules. If two regulated entities jointly fund the loan, the RBI Co-Lending Arrangements Directions, 2025 apply from January 1, 2026 or earlier adoption, with formal risk/revenue sharing and disclosure requirements.

The Digital Lending Directions are not only consumer rules. They apply to digital lending by banks, NBFCs, co-operative banks and All-India Financial Institutions, and define digital lending as remote and automated lending using digital technology. If a procurement marketplace or app performs lending functions as a digital lending app (DLA) or lending service provider (LSP), the RE must comply with KFS, borrower consent, data, grievance, direct fund-flow and LSP oversight rules (RBI Digital Lending Directions, 2025). What differs from consumer app lending is the business context: many B2B flows are relationship-led, invoice-led or direct-to-supplier, and a pure commerce seller’s internal trade credit may sit outside RBI digital-lending rules unless a regulated loan is being originated.

Buy-Side Vs Sell-Side Embedded Finance

Dimension	Buy-side procurement finance	Sell-side marketplace seller finance
Trigger	Buyer needs inputs before production or resale	Seller needs inventory/cash before or after marketplace sales
Primary data	Purchase orders, supplier invoices, GST, goods receipt, buyer receivables	GMV, returns, ratings, settlements, fulfilment performance
Fund flow	Often direct to supplier/end-beneficiary	Often to seller account, settlement-linked repayment or receivable assignment
Main control	End-use certainty and supply access	Settlement visibility and platform status
Main failure mode	Commodity cycle, fake trade, buyer receivable delay	Seller churn, returns, fake GMV, marketplace suspension