Industry Perspectives: Transforming working capital

Fintech company Demica is one of the world’s largest providers of working capital solutions to banks and large corporates, through a broad range of supply chain finance products. In this Industry Perspective, Matt Wreford, the company’s CEO, discusses his outlook for the sector, new trends emerging in the wake of the Covid-19 pandemic, and the growing need for partnership between banks and fintechs.   GTR: Looking at the post-pandemic recovery landscape, what do you see in terms of working capital requirements? Where do the opportunities lie, and what are the challenges? Wreford: In terms of the working capital cycle, the first thing that’s going to happen is that companies are going to be purchasing more raw materials as economies grow. We expect to see a surge in payables, then inventory off the back of that, and then finally receivables, one after the other. Each of these aspects of working capital is going to need different financing techniques. First, we expect to see substantial drawdowns on supply chain finance programmes. We also expect to see a rise in the usage of receivables finance programmes, which have typically been a bit more muted recently as sales have been down in the traditional… continue reading

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