Supply chain trade finance: an industry view

In an otherwise difficult year for the trade finance sector, providers of supply chain finance (SCF) thrived in 2020 as buyers and suppliers scrambled to free up liquidity in response to unprecedented disruption. When Covid-19 containment measures were implemented in markets across the world, SCF providers reported a surge in demand. Despite years of warnings that supplier finance programmes may not survive an economic downturn, it appears that funding remained robust throughout last year’s crisis. However, SCF programmes generally only help suppliers once the goods have arrived at their destination. Unlike with a letter of credit (LC), a buyer has no guarantee of payment and so will generally wait until delivery before approving a supplier’s invoice. According to Tim Nicolle, chief executive of London-based fintech PrimaDollar, that creates space for so-called “supply chain trade finance”: a hybrid product where features from the traditional trade finance sector are blended with those of emerging technology-driven SCF. Speaking to GTR, Nicolle argues that traditional trade finance products are due an overhaul, calling for a model that allows suppliers to be paid earlier – at the point of shipment, rather than delivery – without the buyer having to grapple with the complexity of an… continue reading

Continue reading Supply chain trade finance: an industry view. This article appeared first on CTRM Center.

Source: CTRM Center

Related Posts

Leave a reply