World Supply Chain Finance

Report 2021

Expert views and opinions on today’s global supply chain finance market

Sponsored by Published by
Edited by Michael Bickers

Introduction by Kevin Day

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World Supply Chain Finance
Report 2021

Sponsored by Published by

i
 © BCR Publishing Ltd. 2020
978-1-909200-31-9
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Editor Michael Bickers

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ii
 Preface

Michael
Bickers
Editor

Preface
As in previous years the World Supply Chain Finance Report 2021 is released to coincide with BCR’s
annual Supply Chain Finance Summit. This report aims to offer an insight and review of the global
supply chain finance market, through both regional and specialist articles contributed by industry
experts. For the purposes of this Report, the term ‘supply chain finance’ has been predominantly used
to signify an arrangement whereby a supplier’s invoices are approved by a large buyer for financing by
a bank or other financer.

In the report, the regional coverage includes North and South America, Europe and Asia, with another
article specifically exploring supply chain finance in China. Figures have been gathered for supply
chain finance and, in an attempt to provide meaningful statistics, we have relied heavily on our
contributors’ own expert opinions and estimates. Thus, the figures quoted, particularly in the following
two pages, should be considered indicative as opposed to confirmed.

Much of the content reflects the huge impact of the coronavirus pandemic including the acceleration
in the adoption and development of digitalisation technology and the strive to support fragile supply
chains. Also covered is the rise of ESG and the increasing role it is playing in SCF structures. Despite
the pandemic, the markets have generally seen good growth.

I would like to thank all our contributors to this new edition and also our sponsors, particularly our
main sponsor HPD Lendscape and its CEO Kevin Day who provided the lead article.

London, January 2021

iii
 Estimated Global SCF Volumes and Funds in
Use 2019/2020

The following statistics are derived from industry experts who have provided content for the World Supply Chain
Finance Report. However, as in previous editions, they are very much estimates, and should therefore only be taken
as a guide to industry performance.

The figures show a significant increase in volumes in 2020 over 2019 with global volume up by 35% to USD 1,311bn
and funds in use up by 42% to USD 505bn. The rate of growth has also increased and is likely to be caused by the
impact of the pandemic with an even greater rate of increase in the level utilisation of funds.

Strongest growth is reported in the Americas at 37% by volume and 39% in funds in use, followed by Asia with an
increase of 35% in 2020 compared to 2019 to USD 227bn, and funds in use growth by 70% to USD 69bn. Europe
also saw strong growth and was up by 31% in terms of volume to USD 337bn with a funds in use figure up by 38% to
USD 154bn. Africa in comparison remains small, but also with significant growth of 34% to USD 21bn in volume and
USD 11bn for funds in use, which rose by 29%, although the rate of growth for both volume and funds in use has not
varied.

2015 2016 2017 2018 2019 2020 Increase

Volume Volume Volume Volume Volume Volume 2020 vs
(USD bn) (USD bn) (USD bn) (USD bn) (USD bn) (USD bn) 2019

Asia 55 71 99 128 168 227 35%

Africa 5 7 11 12 16 21 34%

Europe 100 135 162 203 257 337 31%

Americas 170 235 290 400 530 726 37%

TOTAL 330 448 562 743 971 1,311 35%

Increase
2015 FIU 2016 FIU 2017 FIU 2018 FIU 2019 FIU 2020 FIU
2020 vs
(USD bn) (USD bn) (USD bn) (USD bn) (USD bn) (USD bn)
2019

Asia 7 12 17 25 41 69 70%

Africa 2 3 5 7 9 11 29%

Europe 40 55 66 86 112 154 38%

Americas 68 98 123 150 195 271 39%

TOTAL 117 168 210 268 356 505 42%

iv
 2015-2020 Volume (USD bn)

2015-2020 FIU (USD bn)

2020 Volume Distribution 2020 FIU Distribution

v
 Contents

Contents
iii..................... Preface
Michael Bickers, Editor

vii.................... Introduction
World supply chain finance – post COVID-19 SCF opportunity
Kevin Day, CEO, HPD Lendscape

01................... Specialist Articles

02................... Trade finance – unlocking a USD 10 trillion market opportunity
Maurice Benisty, CCO, Demica

07................... Sustainability starts at home, but it must carry through to supply chains
Anil Walia, EMEA Head of Supply Chain Finance – Payables, Deutsche Bank
Bjoern Goedecke, EMEA Supply Chain Finance – Payables, Deutsche Bank

11................... SSCF - the fastest way to a sustainable global economy

Monica Blanco, SCF Consultant, FCI

15................... Trade finance, resilience, and COVID-19

Sanjay Tandon, Regional Head of Product and Propositions, Global Trade and Receivables Finance, Asia Pacific,
HSBC

17................... Next wave innovations in supplier finance

George Shapiro, Executive Chairman, The Interface Financial Group (“IFG”)

22................... Potential impacts on supply chains from the global COVID-19 pandemic
Richard Hayes, Head of Working Capital, Nordea

26................... A better supply chain leads to a better world

Miguel Álvarez Zamorano, Head of Structuring and Product Development, Trade Finance, Santander US

29................... Institutional investment in supply chain finance: approaching a point of inflection

Jolyon Ellwood-Russell, Partner, Simmons & Simmons
Bos Smith, Managing Director, BroadRiver Asset Management

33................... Regional Articles

34................... Asia
Cliff Entrekin, Managing Director, Convergence Capital Group, CEO, Convergence Trade Solutions

37................... China
Xiangfeng Chen, Professor, School of Management, Fudan University

40................... Europe
Eugenio Cavenaghi, Managing Director, Head of Working Capital Solutions, Continental Europe,
Banco Santander S.A.

45................... North America

Samir Moorjani, Head of Working Capital Execution & Program Management, HSBC
Kathleen Mooney, Head of Core Trade Solutions, HSBC

48................... South America

Mauricio Tarazona, Trade Working Capital Finance Head, Citi Latin America

51................... Supply Chain Finance – Directory of Suppliers

63................... IT – Directory of Suppliers
71................... Notes

vi

World supply chain
finance – post
COVID-19 SCF
opportunity
As I write this article, the world
is bracing itself for the infamous
second wave of the COVID-19
pandemic and the Northern
Hemisphere enters a difficult
winter of restrictions aimed at
curbing the spread of the virus,
whilst we await the panacea of a
vaccine.
T
he global pandemic has thrown the
world into chaos; the only thing that
is certain is uncertainty. Against this
backdrop, millions of businesses around
the globe are struggling to survive as
the immediate impact of lockdowns is felt and the
longer tail of economies in tatters has more systemic
consequences for all of us.
The year 2020 was all about protection, safety nets
and measures to prevent a complete collapse of
businesses globally. The most vulnerable are small
and medium enterprises (SMEs), which, according
to the World Bank, represent 90% of all businesses
and create 50% of employment worldwide. Many
governments have provided support measures to
protect businesses from insolvency: loan schemes
and grants to provide cash; job protection schemes
to keep the workforce employed (on paper at least);
tax deferral arrangements, and the relaxation of some
regulatory controls.
Some businesses have effectively hibernated by
cutting costs and laying off staff or using government
schemes; others have limped along, doing their best to
keep active and navigate their way through the crisis.
Introduction
Kevin Day
CEO
HPD
Lendscape
And then there are the businesses that have thrived
as the general populace has adapted to new ways of
working, shopping, and communicating. If only we had
all invested in Zoom before the crisis ensued!
One thing that we have seen over the past 12
months is the speed of change and the ability for
businesses to adapt. Microsoft CEO, Satya Nadella,
recently said, "We've seen two years’ worth of digital
transformation in two months. From remote teamwork
and learning, to sales and customer service, to critical
cloud infrastructure and security." As governments
have imposed restrictions to curb the impact of the
pandemic, we have all needed to adjust our approach
to doing business on a daily basis.
Even pre-pandemic supply chain finance was on
the increase, as corporates sought to support the
cashflow of suppliers whilst optimising their finances
via extended payment terms. As we begin 2021,
this trend is likely to continue as financial support of
supply chains becomes an important part of the global
recovery. Supply chain finance works in virtually all
sectors of business, harnessing the buying power and
security of major corporates to inject vital liquidity into
their upstream supply chains.
But can this important financing tool be extended
to cover more of the SME driven economy, as other
financial support packages are withdrawn? The success
of a supply chain finance programme generally relies
on having a buyer of sufficient scale and credit quality.
Traditionally, it is assumed that the buyer is “blue
chip”, and the invoices will certainly be paid. There also
needs to be a sufficient volume of receivables and
advances to make the programme worthwhile to the
financial institution providing the funding. This eligibility
criteria, credit quality and scale, is a limiting factor to
the growth of this financial product. There are only so
vii
 Introduction
many large corporations out there, so what can be
done to expand this product to a wider market?
With technology shifting rapidly, we see numerous
initiatives looking to streamline all forms of trade
and commerce into a virtual superhighway of digital
transactions. Application Program Interfaces (APIs)
are becoming ubiquitous, enabling IT systems to
connect and create interesting possibilities for the
sharing of data. Open Banking has demonstrated
how access to data has stimulated the creation of
numerous applications to optimise personal and
business finance.
Cloud computing provides huge, number-crunching
power and resilience. More and more organisations
are moving from internal systems to cloud-based
services and on demand computing capacity.
Blockchain technology is beginning to mature and
evolve with some exciting possibilities. Numerous
banks and other financial institutions are collaborating
to engineer networks to facilitate trade. The Internet of
Things (IoT) offers the potential to track and monitor
merchandise as it moves through the supply chain,
and Artificial Intelligence (AI) is gaining traction and
finding practical uses to automate decision making.
There is a spirit of innovation with FinTech continuing
to attract significant investment, despite the
pandemic. Many of these fledgling businesses are
being snapped up by banks, BigTechs and platforms
to enhance existing offerings.
It is hard to predict where this technology evolution
will take us, but there is one common factor and that
is the abundance and richness of data and the power
of computer systems to make this data beneficial.
When looking at the evolution of SCF, as mentioned
previously, the two limiting factors to growth are the
credit quality of the buyer and the costs of managing
the programme relative to the revenue generated for
the financial institution, i.e., the need for volume.
Supply chain finance is a form of secured lending, in
that the advances to the supplier are secured upon
the invoices being paid by the corporate buyer. With a
high calibre corporation at the heart of a programme,
bad debt and fraud risk are perceived to be low.
With smaller organisations, the risks are higher, to
the extent that the funding costs would not provide
suppliers any benefits compared to other forms of
viii
lending available to them. Credit insurance could be
used as a mitigant, however, again this will add cost.
Another approach is to look at the underlying data:
not just the accounts payable, but also the inventory
and accounts receivable of the corporation. With the
increasing use of cloud-based accounting software,
a lender’s ability to connect digitally with buyers
and suppliers to obtain collateral data has never
been easier. Post COVID-19, will there be a general
acceptance that sharing sensitive data with your
bank is a necessary step to unlocking funding? Are
we entering a new “open accounting” world, for the
benefit of lenders and businesses alike?
With gateways into accounting systems, the finance
provider can have visibility of all the financial
undertakings of the company, digitally extracted on
a daily basis. This transparency enables the financial
institutions to take a complete view of the cash
mechanics of the business, from a DPO to a DSO
perspective, with additional security taking over the
inventory and the receivables. This enhanced position
enables the lender to have a better understanding
of risk, even to the extent of the customers of the
corporate. The whole eco-system of suppliers and
customers can be augmented with other data
sources and enable the financial institution to take a
more informed view of the risks involved.
Technology advances can also assist with efficiency.
RegTech is a flourishing area of FinTech that seeks
to help the financial sector deal with regulatory
compliance. Onboarding of new buyers and suppliers
can be greatly improved if businesses are able to
self-certify, thus reducing the KYC and AML effort.
Digital signatures eliminate the need for paper-
based authorisation processes, and stream-lined,
automated processes minimise the need for
manual intervention.
Liquidity for small and medium size business will
be a key part of the global recovery story. Supply
chain finance can be an important financing tool as
countries rebuild their economies, with technology
additionally assisting in enabling greater adoption and
accessibility of this product. Greater transparency
and digitalisation can unlock the potential to provide
more finance, where it is needed most - to support
businesses and to drive economic growth.
Specialist
Articles

1
 Specialist Articles
Maurice
Benisty Trade finance –
CCO
unlocking a USD
10 trillion market
Demica
opportunity
Today, the trade finance industry
is worth USD 1 trillion, making it
one of the largest asset classes
in the world, second only to real
estate.
M
cKinsey has calculated that the total
addressable trade finance market
could be in the region of USD 10
tn of assets (growing at a rate of c.
USD 45bn per year, or close to 5%).
However, it is also estimated that only 10% of those
trade assets are financed.
To put this into context, the total potential market is as
big as the combined GDP of Africa and Latin America,
half of US GDP or two-thirds of Chinese GDP; at present,
the current market is similar to the GDP of Indonesia.
For an industry always hungry for opportunity, how have
financial services missed this open goal for so long and
are firms now starting to wake up to the opportunity?
According to the McKinsey 2020 Global Payment Report,
currently more than 60% of the total addressable trade
finance market is concentrated in supply chain finance
on both fronts, seller-led (with receivables finance
structures, factoring, distribution finance or invoice
finance), and buyer-led (predominantly payables finance
– also known as reverse factoring, supplier finance or
confirming, and dynamic discounting or buyer funding).
Presently, it is estimated that seller-led structures
represent 6x the volume of assets financed on buyer-
led structures.
2
Mixed growth rates - buyer vs seller led
structures
The standout success in the supply chain finance market
in terms of growth rate in recent years has been with
buyer-led structures. Growth in this area is around 15-
20% for payables finance and an impressive 25-30% for
dynamic discounting or buyer funding.
The strong growth of dynamic discounting or buyer
funding structures is partly driven by very low interest
rates, particularly in Europe. The product creates
opportunity for corporates: they can deploy their cash
into retiring their own invoices early at attractive rates,
whilst at the same time improve supplier health. There
is also no need for the contract renegotiation often
associated with approved payables programmes, which
can hold back adoption.
Admittedly, this remains a small segment of the market
(we estimate 2% of the total) and confined to corporates
with significant excess cash balances to deploy. However,
it is a good example of how innovation can spur market
growth and we see opportunity for that to be replicated
across the markets. One such innovation is the creation
of hybrid structures, where the corporate can switch
from dynamic discounting to payables finance - or
vice versa - swiftly, depending on their cash availability
or necessity. This product development increasingly
requires partnership between the corporate, its
funding bank(s) and fintechs who deliver the enabling
technology.
To move the dial on market penetration, innovation and
product development is required in the much larger
seller-led product category, which is growing at a rate
of just 3-5% per annum. Whilst more than 1-2% of
Documentary Trade, it is really just keeping up with GDP
growth, meaning penetration in real terms is flat.

Struggling to generate demand
A number of factors are affecting the capacity of the
market to generate demand.
Growth has historically been dominated by banks or
financial institutions using legacy technology, often
with credit appetite grounded in the home market or
region. In general, proprietary bank platforms were
built in the late 90’s or early 2000’s, based on rigid
structures, sitting in local servers and servicing products
which have not benefited from significant new product
development. Banks have mostly invested in patching
technologies whilst trying to adapt their offering to
accommodate customer needs. A further consideration
is M&A activity in the banking sector, which has left
some banks with a patchwork of different systems
across their operating entities, impeding new product
development.
At the same time, banks have significant technology
demands across their portfolios, with the principal
product groups (e.g., consumer banking, investment
banking) historically having been prioritised for
investment by senior management. Trade finance,
although large as an overall market, is relatively small as
a profit contributor within most banks.
From a commercial perspective, trade finance
programmes often require extended sales cycles and
a very different mix of services to take them live. This
can mean they lack the scale within all but the largest
players to become profitable. As banks prioritise capital
to their core relationships, this leaves product teams
competing against more transactional businesses
which fit more comfortably within their operational and
risk framework. During my time at GE Capital, we very
much focused on acquiring and growing trade finance
businesses that were operationally complex, and
sometimes considered non-core by banks and captive
finance companies. Ironically, the sale process that
led to the wind-down of GE Capital saw many of these
businesses returning to banks, attracted by the strong
risk performance and stable earnings they generated.
Organisationally, many major market participants have
run their products in siloes, with limited interactions
between different product or geographical teams.
A bank-owned factoring business may have little
interaction with its trade receivables securitisation
team, while an approved payables product sits within
the corporate bank as another distinct business unit.
Specialist Articles
Encouragingly, there are signs of this changing. Banks
are reorganising their businesses to bring together the
supply chain finance family of products under simpler
product group structures. Industry groups, such as the
ICC, have created standard definitions for concepts
such as supply chain finance, enabling a consistent
lexicon across the industry. At Demica, we have adopted
the definitions as agreed by the Global Supply Chain
Finance Forum, comprised of the industry’s leading
trade organisations.
Partnering to enable growth
Financial institutions are increasingly partnering with
fintech platforms. This means they can take advantage
of outsourced product development at low upfront
costs. Additionally, many banks with international
aspirations have seen the opportunity to move to
cloud-based solutions, where regulation permits, which
significantly improves their total cost of ownership
(TCO). This measure helps them understand the total
cost of legacy systems, including maintenance costs and
resource implications.
A strong example is the creation of automated supplier
onboarding tools. These enable supply chain finance
programmes to address not only the requirements of
the largest well-rated corporates, but also to extend to
the longer tail of suppliers, improving access to liquidity
for SMEs, the real engine of most economies.
The growth of different fintech platforms has
accelerated in recent years with several well-capitalised
global and regional operators emerging as credible
partners for banks. Over time, we have seen that
they are taking specific specialisation routes, from
those focusing only on dynamic discounting - with shy
incursions into the payables finance field - to those
who are working only on receivables securitisation or
payables finance. Very few can cover the full supply
chain finance spectrum for buyer-led and seller-led
structures.
3
 Specialist Articles

In a high-level analysis, we can identify three broad
categories of banks:
•  small number of truly global banks operating
A expect will continue to grow well into the future.
their own systems and investing large figures to
follow market trends. These banks typically have a
‘ring fenced’ offering, and their products are usually
offered to a select number of financially strong
clients.
•  egional banks, usually working on old software
R starting to fill an important gap when funding new
systems or spreadsheets with very large middle
office teams, operating on local servers and with a
relatively inflexible offering.
•  anks who either do not have a supply chain
B portfolio into the asset class in Europe and North
finance product or who are not operating at scale:
they are typically looking to launch new products
and services.
We are seeing an increased propensity of all three
groups to partner with fintechs – either through a white
label offering or operating through a fintech’s own
branded platform. As such, a historically adversarial
approach, where the narrative was customers
moving from banks to fintechs, has evolved to a more
collaborative and constructive approach. This is even
more visible in emerging markets. Across Asia, Middle
East, Latin America and Africa, we see new entrants
into the market who are unencumbered by legacy IT
infrastructure.
From a customer perspective, the idea of a single
platform that can offer the full product range through
a single client log in, with data ingested from accounts
receivable, accounts payable and inventory ledgers
against which deals can be structured in real-time, will
make it much easier for industry practitioners to sell
through to their end customers. Moreover, being able to
look at risk performance across the portfolio at debtor
level, automated KYC and compliance checks against
third-party databases and real-time dashboards against
which to monitor performance and growth, should
accelerate across the market.
on what can be long sales cycles. We have now signed
12 white label bank partnerships and have a further 30
banks working with us transactionally: numbers that we
New entrants into the market
It is not only banks who are looking to take advantage
of the potential USD 10tn market opportunity in trade
finance. Non-bank financial institutions (NBFIs) are
programmes, especially for sub-investment grade
corporates, where lending has moved from banks to
the private debt markets. We are seeing an increasing
number of specialised lenders extend their product
America.
Asset managers looking to access exposure to better
rated companies are covering the excess of credit line
requirements that banks cannot offer. Risk distribution
is being simplified through digitisation and new platform
tools, improving risk-weighted returns from the asset
class and growing the market. Although NBFIs were
present in the market previously, their growth in 2020
has accelerated.
With record low interest rates and a pressure on
margins, asset managers are hunting for new and
alternative sources of income. Assets they invest in
need to have attractive risk/return ratios relative to
other opportunities of similar risk profiles and be
supported by granular performance data, making trade
finance markets an attractive prospect. Alternatively,
they can fund payables financings where there is good
information on the buyer and where the actual or
implied credit rating is BB or higher.

At Demica, we have seen a rise in the number of

bank RFPs (requests for proposals, the initial step to
launching a new platform) of more than 100% from
2019 to 2020, coming from banks of varying sizes and
operating globally. Early signs going into 2021 show
increased levels of enquiry from banks, with trade
transformation teams reaching out to start a dialogue

4
 Specialist Articles

Impact of COVID-19 A market in transition

Of course, the potential growth opportunity in trade
finance must, like all things in 2020, be considered in
the context of COVID-19. The short-term impact of the
crisis has been significant declines in volumes across
products and geographies. FCI and SFNet have reported
volumes declining 25% for the factoring and the US ABL
markets respectively.
At Demica, we have been analysing industry trends in
our platform data since January 2020, measuring the
impact of COVID-19 on the monthly sales of companies
in different sectors in Europe (full data can be found on
our website, demica.com). The dataset is near real-time
and includes more than a million invoices per month for
around 1,000 large suppliers and 250,000 buyers.
The data shows us that certain industries (e.g.,
technology, logistics) have been net beneficiaries as
consumption and work patterns have shifted to “at
home” vs “at work”, whereas others, such as those
related to industrial production, experienced sharp
declines in Q2 with some recovery as the initial wave of
lockdown ended. We will be monitoring for emerging
trends in 2021 as government support is withdrawn,
and hopefully we see a return to normality with the
introduction of the vaccine programmes.
Many disruptive elements have converged as we have
all dealt with an unexpected and unprecedented
worldwide crisis in 2020. Both the new technology
players and the NBFIs have found conditions have
enabled them to increase their presence in the trade
finance world and take a slice of the USD 10tn pie.
Those will remain long after the pandemic crisis is
gone, with increased collaboration between market
participants.
We expect to see further acceleration of product
development within the supply chain finance family in
2021 and continued growth of new entrants, laying the
foundations for faster growth. Trade transformation
will move beyond digitisation and user experience
to encompass better risk management tools, more
sophisticated configuration tools for market participants
and simplification of cumbersome manual processes for
banks such as risk distribution.

What the crisis has done across the board is to

accelerate the adoption of new technologies. We have
seen this in the increased rate of inbound enquiries, as
consumer adoption of e-commerce grows and filters
through to the B2B space. Banks and corporates alike
are focusing on efficiency and costs, whilst demanding
improvements in user-experience; these are trends that
will accelerate the adoption of new products within the
trade finance space.

5

Sustainability starts at home, but
it must carry through to supply
chains
Speaking at the 2020 SCF
Forum Global, environmental
documentary filmmaker Huw
Cordey noted that “there is
nowhere more important
when considering the
challenges of climate change
than supply chains.”1
H
is claim is based on solid ground. In
May 2020, the Overseas Development
Institute (ODI) estimated that the
share of global emissions linked to
trade could be as high as 38%2 –
demonstrating the sizeable role that the industry
could play in supporting the sustainability agenda.
Much of the power – and therefore much of the
responsibility – to drive mass-change towards more
sustainable global business practices lies in the hands
of large international corporates.
The sticking point is that, while general awareness of
the issue is widespread, few businesses are aware
of the extent of their responsibility. This runs well
beyond integrating sustainable practices into their
own activities to encompass the behaviour of their
Specialist Articles
Anil Walia
EMEA Head of
Supply Chain
Finance –
Payables
Bjoern
Goedecke
EMEA Supply
Chain Finance
– Payables
Deutsche Bank
suppliers as well. For larger companies, the carbon
footprint of their procurement and supply chain is
massive and far beyond their local carbon footprint.
While they may be honest and sincere in their
intentions, their actions are limited, because they do
not understand the full scope of their responsibility
and the impact their activities can have.
We need to progress from this. There is a real
obligation from these companies to drive the change
that is needed. As buyers, they are in a unique
position to drive real, meaningful global change: this
is where progressive supply chain management can
play a huge role.
Yet, awareness among treasury teams, even within
large corporations, remains limited; it presents a
knowledge gap that illustrates one of the major
barriers in progressing the sustainability agenda. It
underlines the importance on installing sustainability
in supply chains, as well as how companies can begin
playing their part.
7
 Specialist Articles
A moral imperative that makes business
sense
Speakers at a United Nations’ General Assembly
High-Level Meeting in 2019 warned that time is
running out to prevent irreversible damage from
climate change. With only 11 years remaining to
avert catastrophe3, the current pace of change is too
sluggish to save the planet.
Furthermore, at the FT Future Forum in October
2020, Dr Matthew Bell, Asia-Pacific climate change
and sustainability services leader for EY, described
the current situation as “the greatest economic
transformation in our lifetime, because it impacts on
every single industry sector. Nobody is immune.”4
Furthering the ESG cause has not just become a
business or a regulatory responsibility; it is a moral
obligation, and it goes beyond climate change to other
areas, such as decent conditions for workers. In 2013,
a poorly constructed and crowded garment factory
in Dhaka, Bangladesh serving several major Western
retailers collapsed, leading to 1,134 deaths.5 Although
this is an extreme example of the kind of issues at
stake, it provides a powerful message to buyers and
acts as a reminder of the responsibility they hold for
what goes on along their supply chains.
Sustainable practices also make sense from a business
perspective. Integrating ESG considerations into the
business helps with stakeholder rebalancing. As a
new breed of environmentally- and socially-conscious
customer comes to the fore, strong ESG credentials
are now required to secure buy-in to a company
brand. For younger generations, this has become
personal – it threatens to affect their lives directly, as
well as the lives of their children in turn.
Demonstrating a commitment to ESG can also help
secure buy-in from investors, who are increasingly
aware that ESG factors represent material risks that
must be managed.6 A strong ESG story will help
companies meet and exceed investors’
expectations while improving access to finance in
the capital markets.
8
It also looks likely that ESG standards will soon be
backed by some degree of regulatory enforcement.
For instance, an EU Action Plan to shape sustainable
global supply chains – promoting human rights, social
and environmental due diligence standards and
transparency – was approved in December 2020.7
Finally, a particularly pertinent consideration in the
current pandemic is the importance of supply chain
resilience. With the crisis triggering sharp shocks to
supply chains across the globe, corporates recognise
the importance of shifting from cost-focused to
resilience-focused practices in their supply chains.
ESG principles typically dovetail with this goal, with
moves such as on-shoring, as well as simplifying or
shortening supply chains to be nearer to end markets,
thus overall helping to drive greater resilience and
foster long-term success.
How companies can integrate ESG into
their supply chains
So, how can companies make a sustainable
supply-chain programme feasible and impactful?
They begin by actively managing the practices of their
suppliers, assessing how sustainable they are and
determining where sustainability can be improved. A
supermarket, for instance, will want to ensure its fish
suppliers source their produce in a responsible
way – for example, capping their hauls at a sustainable
level to maintain stocks over the long term. A
manufacturer of electronic goods should check
that its factory workers benefit from proper
working conditions.
Encouraging suppliers to change their behaviour, of
course, can be a challenge. Small or medium-sized
suppliers in emerging markets may have other more
immediate issues to deal with and may object to the
extra effort required for an environmental or social
benefit they might neither understand nor value. The
key is to set achievable, yet impactful ESG standards
for suppliers to meet – and, at the same time, help
those who fall below requirements to improve.
Companies can even set minimum standards below
which they will not work with a supplier.

As filmmaker Cordey put it in his interview at the
2020 SCF Forum Global, “Just asking suppliers to
make changes without capital and liquidity is a fool’s
errand.”8 Accordingly, the right mixture of support
and incentives is essential and will likely vary from
company to company and case to case. Compelling
propositions include offering “approved supplier”
status to those meeting the highest standards,
which can be used as an impactful marketing tool for
their business.
ESG-linked SCF programmes will play an increasing
role in supporting corporations looking to strengthen
relationships with their suppliers, whilst at the same
time incentivising sustainable behaviour across
the supply chain. One option involves encouraging
sustainable behaviour by offering a more favourable
price for the sale of approved payables under an SCF
programme to those suppliers who meet sustainable
performance standards, in comparison to those who
fall short.
This can be achieved through various means, such
as highly individualised sustainability targets for
an individual seller or standardised sustainability
performance metrics for a group of suppliers.
Another option could be to ring-fence green and
sustainable transactions by committing 100% of
the underlying exports/imports to a specified
purpose. These can then be financed at favourable
rates, provided the purpose clearly meets the
sustainability criteria outlined in internationally
recognised taxonomies, such as the EU Taxonomy
for Sustainable Activities, the Green Bond, and
the Green Loan Standard by the Loan Markets
Associations (LMA).9
These sustainable SCF programmes are set to
change the paradigm for how business and trade are
conducted and funded. They are already helping to
drive the sustainability agenda and will continue to
do so as we emerge from the pandemic.
Specialist Articles
Time and money constraints
Many corporates understandably point to the
time-intensive nature of the process, as well as the
fact that it is fundamentally complex and difficult
to manage. Often, the problems begin as early as
agreeing on the definition of “sustainability”, thus
arising issues around standards, taxonomies and key
performance indicators (KPI). How can one determine
the right KPIs to measure a financing programme,
and how are these measurements taken? These
questions can confound any business lacking the
relevant in-house expertise. Yet, an industry has
sprung up to help address these challenges. Today,
businesses can outsource much of the process to
external agencies, providing structure, experience
and rigour to the process – albeit at a cost.
This leads to another common barrier: many
businesses are concerned with the cost of the
process. Organisations may be unwilling to commit
to costs that do not necessarily yield an immediate
benefit to their business. At this point, it is important
to remember the hidden cost of ESG risk. Poor ESG
practices will levy their own toll on the business – not
necessarily now, but certainly in the future.
Reasons for optimism
The recent past bears examples of supply chain
finance programmes that have proven both
achievable and impactful. In 2014, Levi Strauss &
Co. established a well-documented partnership with
the IFC to provide cheaper working capital funding
to emerging-market suppliers that perform well
against certain ethical, environmental and safety
criteria.10 Puma joined the same IFC programme
two years later, adopting a financing structure with
tiered pricing for short-term working capital, offering
progressively lower costs for suppliers achieving high
scores in its supplier rating system.11
Notable names continued to launch projects in
2020, despite the widespread economic disruption.
Spanish infrastructure and renewable energy firm
Acciona launched a sustainable SCF programme,
streamlining payments to 25 suppliers working on
the construction of a new power plant for converting
waste into electrical energy.12
9
 Specialist Articles

As we move forward, the industry will take steps

to continue breaking down the barriers that hamper
others looking to follow suit. There is scope in the
near future for regulators to provide incentives for
sustainable behaviour. Central banks, for instance,
could provide regulatory capital advantages or
cheaper funding for commercial bank lending to
sustainable companies or supporting sustainable
transactions.

While the onus is principally on large corporates to

keep their houses in order, providers of financial
services share the responsibility to support them as
they drive real improvement right across their
supply chains.

1
http://scfacademy.org/briefing/calls-grow-for-the-supply-chain-finance-market-to-unite-over-climate-change/
2
https://www.odi.org/sites/odi.org.uk/files/resource-documents/200604_counting_carbon_web.pdf
3
https://www.un.org/press/en/2019/ga12131.doc.htm
4
https://www.ft.com/content/7ab0bfb0-b37c-463d-b132-0944b6fe8e8b
5
https://www.bbc.com/news/world-asia-22275597
6
https://home.kpmg/xx/en/home/insights/2020/05/embedding-esg-into-banks-strategies.html
7
https://www.consilium.europa.eu/en/press/press-releases/2020/12/01/human-rights-and-decent-work-in-global-supply-
chains-the-council-approves-conclusions/
8
http://scfacademy.or`xx`x`g/briefing/calls-grow-for-the-supply-chain-finance-market-to-unite-over-climate-change/
9
https://cib.db.com/solutions/sustainable-finance/supply-chain-finance.htm
10
https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/manufacturing/resources/
manufacturing_casestudy_levis
11
https://www.supplychaindigital.com/procurement/puma-and-ifc-reward-suppliers-emerging-markets-environmental-
and-social-performance
12
http://scfacademy.org/briefing/calls-grow-for-the-supply-chain-finance-market-to-unite-over-climate-change/

10

SSCF - the fastest way
to a sustainable global
economy
Build Back Better, the Japanese
concept of investing in disaster
risk reduction, adopted by the UN
in 2015 in the Sendai Framework
for Disaster Risk Reduction, has
become a well-known concept
during this health crisis.
I
n the world of trade, where seven out of the ten
identified highest impact risks have shocked global
supply chains, and where supply chain finance
is being undermined by the specialised press
and several governments in several countries,
the motto Build Back Better takes on an extreme
opportunity to improve sustainability in supply chains
through SCF.
The time when pollution or poor labour conditions
were seen by companies and consumers as the price of
doing business no longer exists. Thanks to the internet,
consumers are better informed than ever and are
increasingly demanding ethical codes from companies.
All companies, regardless of where they stand in the
supply chain, are no longer exclusively responsible
to their shareholders; they are also responsible and
accountable to society and will play a greater role in the
development of sustainable markets.
Financial providers, as part of the value chain, will
support trade, while minimising future negative impacts
like the ones we have experienced in previous years,
such as pollution, deforestation, desertification, and
illegal labour. This has been caused by neglecting
resources that can be regenerated to make
corporations and supply chains sustainable in time.
Specialist Articles
Monica
Blanco
SCF Consultant
FCI
Sustainability fell under philanthropy as a chapter
in corporate social responsibility and investor
relationships. Frequently it was enough to say that a
company was as sustainable as it could be. But the
financial crisis and the pandemic have both revealed
that we were living under inappropriate governance
rules, based exclusively on short-term targets
and profit.
Exactly 18 years ago, the oil tanker Prestige broke
in two and sank off the north-west coast of Spain,
spilling 20,000 tons of fuel into the sea, affecting 2,000
kilometres of shore; the devastation spreading to
Portugal and France, causing the third biggest and
most costly accident in history, after Chernobyl. Not
only was it costly in money, but it was also a social and
environmental disaster of the greatest magnitude.
Investigation into this catastrophe showed that the oil
trade was like Russian dolls, where companies based
in tax havens were hidden one inside the other. The
owner of the ship was based in Liberia. The flag of
the vessel, in the Virgin Islands - a Russian company
- Crown Resources - that hired the battered ship, as a
branch of a financial company based in Gibraltar, and
the Russian consortia Alfa Group, based in Switzerland
(that owned and managed said ship), were merely the
tip of the iceberg. Within such arrangements were
other companies and prestigious banks: all of them
held statements of the highest environmental care in
their Annual Reports, when in reality they all eluded
their responsibilities in the oil spill.
Eighteen years later, a pandemic has broken out, and
the reality is that corporate governance and self-
regulation has captured the attention of policy makers.
As I am writing this, the European Commission has an
open public consultation on sustainable corporate
11
 Specialist Articles
governance that will help put forward a proposal in
2021. This consultation complements two studies
that focus on sustainable and responsible corporate
behaviour, to prevent adverse influences on society and
the environment. Its findings might entail new regulation
at EU level, requiring companies to report publicly on
steps they have taken to identify, address, prevent and
mitigate any adverse impact of their operations and
on third-party businesses. There were some attempts
for the development of such regulations in the UK or
in France and, at the European level, under the EU
Non-Financial Reporting Standards. However, such
reporting requirements related to the adequacy and
the frequency of the reporting but did not meet any
required standards or provide any remedy to those
found affected, which ultimately raised concerns about
the effectiveness of these reports.
For the European regulator, companies still have a
short-term and financial focus that affects their ability
to integrate sustainability into their risk management
and business strategy. This is the reason there are plans
to develop new regulation where Environmental, Social
and Governance (ESG) risk analysis and metrics will
be designed and used by investors as an insight into
a company’s quality of management. Eventually these
will convert into financially relevant business indicators,
providing good insight for investors.
The regulator has put supply chains as a central core
value of sustainable development, and its focal point
is the due diligence process. This new due diligence
process will not only include the identification and
assessment of potential impacts, but will also implement
measures to act upon findings. For the Prestige case,
this could have made a difference. The guarantee
given to the shipping company and the finance given
to the owner of the oil would have not passed ESG risk
analysis. The environmental dangers of the fuel oil used
is twice as dangerous as regular fuel as it is non-water
soluble: this would have required better due diligence
of the maritime transport; an obsolete and unsecure
single-hull tanker with pending application of the EU
Directive on maritime safety. By applying ESG analyses
to this great environmental and social catastrophe,
health and safety issues and vast economic losses could
have been avoided.
12
Global organisations, financial institutions and
technological providers, as integral parts of supply
chains, should act as proactive promoters and enablers
of this change which will bring not only a better,
more sustainable future, but also great financial and
reputational profit to our organisations. This is the time
where society, as our stakeholders, demands not to
be reactive.
Recently a development bank declined offering a risk
participation guarantee to a financial institution for an
SCF programme with an anchor client in the mining
sector, due to the environmental risks associated
with this industry. However, it would be better to take
an active role in the development of environmental
management standards as a condition to offer a risk
participation agreement, which would greatly benefit the
society as a whole, instead of rejecting the programme.
Although there are some efforts to make sustainable
supply chain finance programmes, like the ones run by
Puma and Levi Strauss, these still generally remain in the
sphere of loans or bonds given to certain suppliers, and
not in factoring or reverse factoring programmes.
If we think about the fastest and most secure way to
a future of sustainable supply chain finance, reverse
factoring is the most challenging yet more promising
technique to achieve these goals because of its
cascading effect.
The challenge for financial institutions is to take the
few (but courageous) steps necessary to achieve these
goals, which will start by thinking and designing how
to develop sustainable SCF deals by collaborating with
anchor clients in defining and tailoring more sustainable
programmes, as well as helping them understand how
they can add value to each process.
By integrating ESG parameters, created together with
anchor clients and translating them into KYC and
on-boarding efforts, we can achieve a great deal of
sustainability in a shorter amount of time. The key
challenge here is to have the right metrics against which
to measure suppliers and also the right approach to
make the benefits of sustainability investment easier to
understand. These programmes can create incentive for
them to take part by offering preferential discount rates.
 Specialist Articles

Another challenge is how to deal with ESG data, and

here is a great opportunity for technology providers
to differentiate themselves. Many studies show that
blockchain will be an asset for this kind of transaction.
However, blockchain demands a unified, multilateral
approach to regulation, and how to interpret such
regulation in code is still difficult. It would be hard if ESG
regulation is not unified over all geographies as it would
require a supranational body to coordinate efforts,
which would not be easy to develop.

Until then, only cooperative supply chain finance

relationships could be the answer to a quicker,
sustainable finance approach. For this reason,
associations like FCI - that are the link between financial
institutions promoting and ensuring best practice
in supply chain finance - can play a major role in
educating, together with development banks and other
international organisations. They can be part of the
transformation, promoting real change and ensuring
that we Build Back Better.

13
 Specialist Articles

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14 More information: www.fci.nl

 Specialist Articles

Sanjay Tandon
Regional Head

Trade finance, of Product and

Propositions,
Global Trade
resilience, and and Receivables
Finance, Asia
COVID-19 Pacific

HSBC

In April-May 2020, within about Throughout 2020 and into 2021, the need to shore up
two months of the World finances remains a priority for Asia-Pacific businesses,
with trade finance solutions such as receivables finance
Health Organisation’s first and supply chain finance becoming more popular.
characterisation of COVID-19 as a
pandemic, HSBC surveyed more How a company manages its working capital will
determine whether it survives the COVID-19 crisis.
than 2,600 businesses across Regulators have also emphasised the need for banks
14 markets, including 1,404 to continue to support working capital requirements
businesses from seven of their clients. Regulated markets like Bangladesh
have relaxed financing norms to ensure the flow of
Asia-Pacific markets: Australia, liquidity to factories. In June 2020, the central bank of
Hong Kong, India, Indonesia, Bangladesh allowed “export under open account credit
mainland China, Malaysia and terms against payment undertaking or payment risk
coverage, with the option of early payment arrangement
Singapore. on a non-recourse basis” providing exporters the much-

A
needed access to foreign currency financing.

mong the questions asked, was “what will
be the biggest barriers to your business
becoming more resilient over the next
six months?”
The three biggest barriers identified by
Asia-Pacific businesses were mainly financial, while
globally cultural barriers outweighed financial ones
(see table below).
We are proud to have carried out the first cross-border
receivables finance transaction in Bangladesh, allowing
a ready-made garment exporter to receive early
payment under a buyer’s default risk coverage provided
by HSBC.
As evident from the Bangladesh instance, receivables
finance is a very powerful tool which allows exporters to
seek out new markets, reduces banking costs and helps
unlock much-needed working capital.

Among Asia-Pacific businesses Among all businesses

Sufficient cash flow (33%) Employee morale (33%)

External/macro factors which are out of our Sufficient cash flow (31%)
control (31%)

Cost of working capital (30%) Ability to bring employees quickly up to speed on

new ways of working (27%)

15
 Specialist Articles
We have also seen a significant increase in the use of
supply chain finance programs (referred to as ‘reverse
factoring’ in some markets) to ensure supply-chain
stability and continued access to working capital as
a result of the slowdown and disruptions caused
by COVID-19. Our internal data show a double-digit
growth in new suppliers joining these programs and
usage of the programs.
The need to get working capital into supply chains,
while always strong, has been further underscored by
the impact of COVID-19. Another factor which has led
to increased demand for receivables and supply chain
finance solutions is heightened credit risks.
Recently HSBC conducted another detailed study
of business sentiment. The latest ‘Navigator’ survey,
released in December, confirms the significant
opportunity for receivables finance in Asia. The
results are drawn from a survey of more than 10,000
businesses across 39 markets, including 4,131
businesses in 16 Asia-Pacific markets.
The top five emerging trends have clear implications
for working capital solutions and may lead to further
development of the receivables finance industry in Asia.
1. Recovery: Most businesses expect a return to
profitability in 2021
2. Evolution not revolution: COVID-19 has spurred
short-term change for most businesses
3. E-commerce: High-growth firms now make a
majority of their sales online
4. Sustainability pays: 9 in 10 companies expect
sustainability performance to boost sales
5. Regionalization. Mainland China has surpassed
the US as the main foreign market for firms in Asia
Pacific
The survey identifies the short- and medium-term
impact from COVID-19 and shows how that affects
business priorities. It highlights the importance of
cash flow management and finding new markets
to complement existing markets. Both play to the
strengths of receivables finance in providing liquidity
and buyer credit risk assessment and mitigation as well
as, when needed, support for cross-border collection
of open account receivables.
16
The Navigator study also points to the opportunity
from countries like Vietnam and Bangladesh where the
receivables finance industry is in its infancy.
There is a clear business priority given to
“environmental, social and governance” (ESG) which
underlines the importance for the receivables finance
industry of adapting the product to support validated
ESG investment.
The study also highlights the growth and potential
from intra-regional trade; this will create opportunities
for receivables finance providers with the ability to
manage credit exposures.
The study points to challenges given the focus
on new technology and entrepreneurship. The
receivables finance industry must strengthen its
capacity to support the trade in services, in addition
to its traditional strength in the trade in goods. It
must support new businesses serving new markets.
E-commerce will drive a need for a step change in
speed of buyer credit decisions and finding solutions
for increased B2B and B2C conducted on open
account credit terms. Receivables finance providers
must also connect with customers through the
channels convenient to customers, and increasingly
expect to do so digitally.
The study found that many businesses are adapting to
the conditions, with some notably thriving. Sales-linked
receivables finance has clear advantages to support
such thriving businesses.
Regrettably but understandably, some businesses
were reporting that they are struggling. This appears
across all business sizes, but particularly in smaller
businesses. This is a reminder to the receivables
finance industry to be prepared to manage more
businesses in distress and reinforce defences against
fraud, which is often linked to business distress.
Other studies (for example, from the credit insurance
industry) predict an increase of business insolvency
in 2021.
For more information on HSBC Navigator, please go to:
https://www.business.hsbc.com/navigator

Next wave innovations
in supplier finance
Throughout this decade with
the growth of buyer-led supply
chain finance programs,
or buyer-sponsored early
payment services, teamed
with the increase in attention
to SCF services in general, we
have witnessed significant
technological transformations
within the industry.
S
everal new developments based on big
data, API integration, blockchain technology
and machine learning have introduced
innovative features to the market, such as
easy and quick online on-boarding and KYC/
AML, digital integration between parties and more
efficient decision-making.
However, after this digital transformation is completed,
by design, the vast majority of supply chain finance
programs have the same fundamental and standard
characteristics as old SCF programs. One of the
traditionally accepted requirements for standard SCF
programs, administered by many banks or fintech
providers, is a requirement for buyer’s guarantee in
the form of irrevocable payment undertaking (IPU), or
other payment obligations.
For several years, SCF experts have been discussing
accounting treatment issues raised by Moody’s, Fitch
and the Big Four accounting firms.
Specialist Articles
George
Shapiro
Executive
Chairman
The Interface
Financial Group
(“IFG”)
One of the issues is related to the buyer guarantee,
since signing a buyer guarantee in some cases may
call for modification, reclassification and derecognition
of trade payables. Whilst this discussion is far from
over, several SCF providers have developed (or are in
the process of developing) new solutions which would
allow buyer-sponsored SCF programs to provide early
payment services to suppliers without an IPU or other
types of buyer guarantees.
SCF without buyer guarantees
For the last three years we have repeatedly heard
from some SCF experts that there are no accounting
treatment issues related to a buyer’s guarantee and
that there is no need for SCF programs without a
buyer’s guarantee. I cannot agree with this. I think that
SCF services without buyer’s guarantee requirements
will be increasingly welcomed by participants of a
SCF services.
For example, a next generation of digital SCF platforms
was developed and deployed with no requirement
for an IPU or any other form of buyer’s guarantee.
Based on fast data from thousands of integrated
data points, a decision engine produces dynamic
credit limits for each buyer-supplier pair in real time.
This method allows the provider to predict post-
confirmation dilution levels and to reliably mitigate the
risk of payment dilutions created by buyer’s legitimate
chargebacks, set-offs, withholdings, counterclaims,
etc. for approved and scheduled for payment invoices.
This service extends to all suppliers, including long-tail,
offering access to early payment programs.
17
 Specialist Articles
Current and inexpensive access to a wealth of
data as well as to high computation speed provides
the ability to deal with dilution risk and instantly
structure customized risk mitigation sequence at the
decision point.
In combination with a one-time click-through sign-up
process, instant compliance (KYC, AML, CTF) and
real-time underwriting, platforms like this can offer
24/7 access to early payment for all suppliers.
Here is a simplified example of a dynamic credit limit
engine for a SCF platform:
Below is a sample of an early payment supplier portal
app based on the dynamic credit limit method:
18
Alternative supplier finance solutions without buyer
guarantee requirements are being introduced by
other providers, such as invoice payment confidence
scoring based on AI/ML predictions.
I am sure that the SCF industry will witness further
development of other modern technology-based
platforms without buyer guarantee requirements in
the near future.
Multi-tier SCF
Another relatively new development in supplier
finance is the introduction of multi-tier SCF platforms.
It has been clear for a while that if financial institutions
are able to offer reliable early payment services to all
tiers of a buyer’s supply chain, then it may significantly
increase the stability of critical chain elements.
Rapid growth of blockchain technology, with its smart
contracts, has provided the necessary tools for the
creation of multi-tier SCF platforms. Several of these
platforms like LinkLogis (Hong Kong/China), RootAnt
(Singapore), Tallyx (India, US) amongst others have
strengthened and improved what they can offer.
I have reviewed several multi-tier SCF platforms,
from a super-complicated structure with its own
digital currency to a very clean, simple and logical
architecture.
The following is a very simplified structure of a
multi-tier SCF offering:

In this case the buyer issues a digital payment
undertaking (“DPU”) to a Tier 1 supplier, assigned
to SCF platform/funders. Based on the DPU, the
transferable and divisible Digital Receipt ("RDPU")
is created, where a percentage of the RDPU can be
shared with a lower tier supplier and so on. Since this
system is based on diversified ledger technology with
smart contracts, it delivers a very reliable, verifiable,
transparent and enforceable legal setting.
The limitation of this approach is the necessity of buyer
guarantees, like a DPU.
So, the main question is whether there is any way
to create multi-tier SCF offerings without buyer
guarantees: I would argue that there is.
Multi-tier SCF without a buyer guarantee
What if we use one of the dilution prediction and risk
mitigation methods to avoid the requirement for buyer
guarantees in multi-tier SCF systems? How can we do
this without a DPU or its analogue?
Since the risk of dilution is taken care of, what if we just
use assignment of debt via Digital Notice of Assignment
(“DNOA”) and its receipts (“RDNOA”)?
In this case a very simplified structure would be:
Specialist Articles
Now that we have invoice payments assigned to banks
or financial Institutions and transferable and divisible
digital receipt of the digital assignment could be used
to fund multi-tier suppliers.
While a multi-tier SCF offering sounds useful, I cannot
yet predict whether the market demand for this type of
service will be substantial. The scale of buyers’ demand
for this product is yet to be determined but the goal of
this article is to demonstrate that multi-tier SCF services
have arrived and are ready to be used as needed.
Conclusions
I suspect that some part of the SCF community will
insist that there is no real problem with an IPU and that
the market for multi-tier early payment services is not
big enough. Moreover, even if the demand for both
of these new approaches grows, it is likely to occur in
the distant future. Additionally, the cost and effort of
making the transformation of current SCF systems
and platforms to include these new services could be
too high.
Again, I do not think that this position is correct.
Consider this: if buyers are given the choice of having
SCF programs with a buyer guarantee requirement
or without, what would their choice be? Likewise, if
buyers are offered multi-tier SCF services without any
additional undertaking in comparison with standard
SCF programs, what would they choose?
In any case, supporting smart innovations is the way
for continued improvement and expansion of the
supplier finance market.
19
 Specialist Articles

20
RECEIVABLES
FINANCE
INTELLIGENCE
Events, Publications, News “This was such a well
organised event, with
BCR Publishing is the world’s leading provider of a great collection
receivables finance intelligence. Working with industry
of industry leading
leading organisations, experts, governments and
universities, BCR delivers expertise in factoring, professionals who
receivables and supply chain finance to a global audience.
were more than
happy to share their
EVENTS
knowledge”
BCR create and deliver events that examine the future of
receivables finance, factoring, alternative finance, supply
chain finance, working capital management and trade
receivables securitisation.

Attendees and speakers at our events represent leading

commercial banks, factors, invoice discounters, corporates,
fintechs and AltFin platforms, credit insurers, law firms,
brokers and consultants. We also partner with the main
industry trade bodies and development banks.
www.bcrpub.com/events

Georgina Jelley: +44 (0)20 8466 6987

georgina.jelley@bcrpub.com
 Specialist Articles
Richard Hayes
Head of Working
Potential impacts on
Capital
supply chains from
the global COVID-19
Nordea
pandemic
Trading patterns, supply chains
and market demand have all
been heavily affected by the
shock of the COVID-19 pandemic
and the associated lockdowns
implemented around the world.
As economies slowly begin to
recover, it remains to be seen
how extensively supply chains will
be transformed.
T
he COVID-19 pandemic has been a
multifaceted and evolving crisis. It certainly
is not the first global crisis or pandemic,
but what has made it unique is its fluidity
and impact in a time when the global
economy is so interconnected and dependant. Unlike
the global financial crisis, this is a crisis which has
not been founded in the financial sector but the real
economy. It has and continues to be both a supply
and demand crisis. As cases of the virus ebb and flow
around the globe, the impacts continue to change
and impact businesses differently depending on
their location. Those impacts on business have been
real and very visible with certain specific sectors
being impacted severely, such as travel, hospitality
and retail. It is likely that in the medium-term the
challenges these sectors face will continue, despite
the anticipated roll out of vaccination programmes.
22
For treasuries and supply chain professionals, systemic
supply chain shock isn’t a new phenomenon. SARS,
the tsunami in Japan in 2011 and flooding in Thailand
occurring in the same year all stretched supply chain
resilience. What makes this systemic shock unique is
the level of interconnectivity and integration of global
supply chains, which are now more intricate and
globally dispersed than ever. The move from in-house
production to sourcing, generally at the lowest cost,
has resulted in a myriad of suppliers and sub-suppliers
connected together to enable complex products
to be assembled. Even products with relatively few
components have evolved to require multi-layered
supply chains of one kind or another. It is therefore
inevitable that a systemic shock of the magnitude
of the COVID-19 pandemic will have impacts on
how supply chains are structured and operated in
the future.
In the Nordics we have already seen the initial impacts
of the COVID-19 pandemic on corporates. The WTO
indicates that global container throughput is down
20%, and the number of new export orders down
40%; Nordic companies have been heavily impacted as
well. Nordea’s analysis indicates that Nordic corporate
revenues are down 7% compared to 2019 interim
reports, with Sweden and Norway’s heavy industrial
and commodities industries taking the biggest hit.
When comparing the second quarter results to the first
quarter, a 3% decrease in revenues is seen. Although it
is too early to tell, this may well indicate a ‘W’ or
‘V’-shaped recovery of the Nordic economy.
Besides decreasing revenues, operating profits are
struggling as well. The average operating profit for
Nordic Companies fell 21%, with Sweden seeing the
largest decrease of 28% compared to 2019’s half
year results.

With decreasing revenues and margins, the study
also reveals a slightly increasing level of net working
capital. The development is mainly due to a fall in trade
receivables, as companies are struggling with sales.
Furthermore, a small increase in inventories has been
detected which would be a sign of a potential recession
under normal trading conditions.
Aim for full visibility
Early in the crisis, the sudden halt in manufacturing
and decreased availability of raw materials plus
restrictions to international trade left companies supply
chains suddenly vulnerable in all sorts of unexpected
areas. In order to ensure they are more resilient to a
sudden change in business conditions in the future,
companies will need to fully map their supply chains to
ensure extensive visibility.
In many corporate supply chains, professionals and
buyers have good visibility of their primary suppliers
and their financial health, but they do not necessarily
have visibility further along the supply chain into their
secondary and tertiary suppliers. It’s only really once a
company understands what their full set of supplier’s
suppliers are doing and how they’re performing that
they can gain the necessary insight, set and analyse key
risk KPIs and understand early warning signs of stress.
This should then position them to understand where
system pressures are building that could subsequently
disrupt manufacturing in the future. Vehicle production
provides a good illustration of the challenges faced
in controlling supply chains. It might be possible to
manufacture 90% of a car, but if you cannot source
the steering wheel assembly, then you have not got
a finished product to sell. The manufacturer of the
key steering wheel components might actually not be
a primary supplier, but a secondary or even tertiary
supplier where your visibility is limited.
Methods for ensuring improved visibility of the supply
chain include better use of data analytics to fully map
interconnectivity and reliance between suppliers in the
production network. Also, a more focused approach in
understanding supplier relationships is recommended,
even if buyers and sellers do not directly interact as
the next primary step on the supply chain. Increasing
knowledge of the downstream supply chain means
using data not only to predict your own sales, but to
predict your customer’s customers sales, as this will of
course influence you with regards to ordering volumes
and sales forecasts. As companies move further from
Specialist Articles
offline to online sales as a resilience measure, more
enhanced and relevant data become available to assist
planning, meaning companies need to be increasingly
mature in their thinking and approach.
Evolutions in supply chain financing can certainly
provide much-needed support to suppliers further
down the supply chain. The market is beginning to look
more into opportunities around purchase order (PO)
discounting, which provides much needed working
capital earlier in the process. Tokenised SCF is another
interesting topic which will continue to gain traction
and pace as a result of the COVID-19 pandemic. Data
held securely in a DLT environment allows suppliers
to discount some or all of a token, passing the rest
further down the chain to provide needed working
capital to secondary and tertiary suppliers.
A rise in supply chain costs?
As businesses look to recover and grow when the
global economy begins to emerge from the pandemic,
it is likely that many companies will carefully examine
their sourcing processes to establish whether there
is the possibility of increasing the diversity of their
suppliers. The early stages of the pandemic showed
that a heavy reliance on China caused significant
production delays. China no longer simply assembles
products; it manufactures the components for the
products. This further increases supply chain risk
and interconnectivity, whilst creating a potential new
bottleneck. The early stages of the pandemic helped
illustrate that supply chain concerns are not just
limited to those who directly manufacture from – in
this example – China, but that disruption could be felt
by those companies whose raw materials are trapped
in China too. For example, a significant proportion of
the factories in Bangladesh source raw materials from
China. The drive to establish lean, Just-in-Time, low-cost
supply chains come with clear inherent risks at times of
global systemic shock.
There is clearly a significant dependency on China
and this is likely to continue, but it is also likely that we
may begin to see buyers looking at a China plus one
or China plus two country strategy, to provide more
of a hedge for future systemic shock. We often find
(particularly around the more complex technology
types of manufacturing) companies already operate
a China plus Vietnam, China plus Indonesia or China
plus Thailand supply chain model, and this is likely to
increase in importance. These countries are already
23
 Specialist Articles
established as large hubs for the more sophisticated
sorts of manufacturing, and it is probable that we
would see a broadening out of the China plus one or
plus two strategy to diversify future supply chain risk.
Complementing a China plus one or two strategy is the
emerging trend of nearshoring. It is unlikely that we will
see a movement of full production back to destination
markets, but it could well be the case that in Europe,
for example, areas such as southern and eastern
Europe or Turkey see an increase in manufacturing
because of the pandemic. Transferring production
closer to destination markets in theory offers added
protection against supply chain risks. European
national governments have deployed extensive
support packages for their economies in collaboration
with regional bodies, which means they will be looking
to encourage more value with manufacturing to be
transferred to Europe. With increased government
support for national industry sectors, there may
be added incentives for producers to manufacture
finished goods and components nearer to home.
Support packages have built up both corporate and
government debt, so we will very likely see measures
put in place to enable national economies to grow
themselves out of their debt burdens. There will of
course be a strong incentive to create growth within
the European Union, which supports the argument
for bringing employment and growth to Europe as
a natural consequence of addressing the COVID-19
problems within the national economies.
Any potential diversification of sourcing markets and
increased focus on markets nearer to destination is
likely to have a subsequent knock-on impact on cost.
Business have undoubtedly seen an increase in costs
due to the COVID-19 pandemic; costs of imports
and exports across borders have increased due to
factors such as additional inspections, reduced hours
of operations, border closures and lack of transport
capacity, etc. These cost increases can include
the investment that is required to bring additional
countries and sites into supply chains alongside or
instead of China. Companies considering near shoring
will also experience cost increases as a result of these
decisions. In recent years, many companies have
pursued a form of cost arbitrage as they try to find
countries with the lowest salaries for hosting their
production sites. As they now consider alternative
production locations, the obvious route to compensate
increases in costs is to look at productivity. One of
the learnings from the Nordics that has been a key to
24
growth and that may be replicated in other regions is
that if you need to move your supply chain, you need
to increase productivity as well. There is a natural
evolution that as salaries pick up in traditionally lower
cost locations, competition increases, and companies
look to automate and roboticise wherever possible
in order to increase productivity. Costs could well
initially increase, but the demand that they come
down will prove to be a catalyst that is likely to
energise productivity.
Digitalisation no longer optional
One noticeable aspect of the coronavirus crisis
has been limitations caused by international trade
processes that are still heavily reliant on paper.
Difficulties encountered in the physical delivery of
trade documents have further spurred the switch
to fully digital trade tools, such as blockchain-based
platforms. The emergency measures taken where
authorities and third parties in the supply chain have
accepted electronic documents in the form of PDFs
and copies rather than originals, have also shown that
the switch to digital has worked and can be scaled up.
This may lead to a more rapid change of culture and
behaviour within trade practices.
The adoption of new digital trade technologies is
expected to continue at a rapid pace, making it
possible to automate the actual trade process with
digitised data entry points for companies, banks and
logistics providers. Advanced systems are expected to
use AI (Artificial Intelligence) to robotise the necessary
steps for buying and selling goods, thereby simplifying
and speeding up the global trading system. The move
to fully digital and decentralised platforms in order
to exchange digitised trade such as guarantees,
electronic bills of lading or letters of credit as well as
supply chain financing and receivables solutions, will
continue to replace paper trade methods that have
stayed the same for many years. Corporates and
banks have had to transform the way they operate in
2020 to a more remote and digital set up. Treasuries
will therefore demand that their trade infrastructure
covers the entire financial supply chain, aggregated
into one centralised dashboard, allowing them to
transact on both a structured and open account basis,
in order to support and expand their businesses.
 Specialist Articles

The rapid evolution of digitised trade solutions has

slowly been gaining momentum in recent years,
shifting from proof of concept to mainstream adoption.
The experience of 2020 has proven that digitalisation
is no longer optional. Everyone has witnessed how
working from home has become even more prominent,
but from a purely treasury perspective the crisis really
does highlight the fact that trade and supply chains
specifically have got to be as digital as possible. The
uncertainties and potential risks caused by an over-
reliance on traditional paper trade documents are all
too clear for everyone to see.

The year 2020 has undoubtedly been challenging

for society and our national economies. The global
health crisis has shone a light on the fragility of the
interconnectivity we have relied upon for growth and
unparalleled access to goods and services in recent
years. The digitalisation of trade (which has historically
been slow) to reach mass adoption has, as result of
the pandemic, seen a new urgent focus. Buyers in
supply chain relationships will have been exposed to
periods of significant stress in 2020 and through closer
visibility, dialogue and engagement with suppliers, they
can create stronger and more resilient supply chains.
Whilst the road to full economic recovery may be long
and not necessary the most direct, it is clear that the
journey has started and there will be changes to global
supply chains as a result.

25
 Specialist Articles
Miguel Álvarez
Zamorano
Head of
Structuring
and Product
Development, A better supply chain
leads to a better world
Trade Finance
Santander US
Supply chain finance began in the
1990s when companies realised
the value that could be created
between their businesses and
trading partners in the form of
more flexible and affordable
credit, especially for smaller
suppliers.
T
he pace of development accelerated after
the financial crisis in 2008, due to the
need for liquidity and to alleviate stress
in the supply chain. These programs
have become mainstream as technology,
onboarding, and general understanding improved.
We can anticipate that the current crisis caused by
the global pandemic will heighten the need for such
programs as companies continue to focus on good
liquidity and working capital management, as well as
the need to support key trading partners. We have
seen and will continue to see many innovations in
legal structures, platforms and functionality, and
are perhaps now looking at the next frontier in the
development of supply chain, with the integration
of environmental, social, and governance (ESG)
concepts. The integration of ESG concepts will add
a new dimension to SCF, offering the opportunity to
measure and recognise programs and reward trading
partners for meeting objective criteria that will lead
to a more sustainable supply chain, and a potentially
better world.
26
ESG is the incorporation of environmental, social and
governance factors to analyse the performance of
a company or a business. It is very common to link
the concept of ESG solely with environmental-related
issues, as we think about green bonds or green
letters of credit (LCs). The ‘E’ in ESG is arguably the
most recurrent topic that is discussed within ESG
and remains top of mind. The World Meteorological
Organisation just announced that CO2 emissions will
reach a new record in 2020. Many believe the situation
is unsustainable, and immediate action is needed to
avert the increasing pace of natural disasters and other
environmental issues.
In addition to the environmental issues in our ESG
analysis, we should also pay attention to the ‘S’
and ‘G’ factors. ‘S’ refers to the social factors that
affect the performance of a company – such as
the working conditions, diversity, the relationship
between employees and employer, and the company’s
community involvement. These factors will help
determine long-term sustainability for a business. The
'G' factors include, among others, appropriateness of
policies, company structure, compensation, values,
transparency and reporting. All these factors are
important in the analysis of the performance of a
company and have a direct link to the reputation and
other sensitive aspects of a business.
The concepts of being greener or applying more social
justice to the world might make some people think that
ESG is a philanthropic or moral concept, rather than
an economic one. There is reliable data that shows
that entities that consider ESG factors outperform
those that do not. Currently, there is a strong interest
in the market for ESG and investors are increasingly
demanding this type of asset. According to data
compiled by Bloomberg, investments inflows to ESG
Exchange Traded Funds (ETFs) have surged to

USD 22bn as of 25 October 2020: that’s three times
the 2019 total. Investing in ESG is here to stay.
It is only a matter of time before these concepts
are incorporated into SCF programs where more
sustainable supply chains and better corporate
behaviors can be promoted across multiple
organisations in a single program.
ESG within supply chain finance
In order to determine how ESG can be incorporated
into SCF, we need to understand the value of placing
sustainability into our supply chain finance programs.
An ESG SCF program is a solution that incorporates
sustainability assessments as a differentiating feature
for the implementation of the program. Basically,
ESG factors will be considered to give a rating to the
suppliers that want to participate in the program. If
minimum requirements are met, the candidate can join
the program. If not, the supplier will not be eligible to
participate. It might sound like a simple concept, but it
requires an enhanced due diligence analysis that must
be performed on the supplier side. The companies
that put in place the program will have to align with
the SCF provider, and the strategy must consider the
application of the ESG ratings. This is not a simple task,
and it will require extra effort to implement this type
of program.
Large corporations acting as buyers in these programs
have corporate sustainability and ESG goals. These
companies can incorporate their own criteria,
alongside objective third-party established frameworks
to reinforce the strengths of the supply chain by
offering a very competitive working capital financing
tool; rewarding suppliers with better terms for
exhibiting healthier corporate behaviors. For suppliers,
aside from reinforcing their commercial relationship
with the buyers, the SCF programs might offer a
better discount rate and give them the opportunity to
improve their working capital management.
Specialist Articles
The way forward to the better world
While the value in developing these programs may
seem obvious, there remain challenges in turning this
opportunity into a reality. There are three areas that
need to be addressed to accelerate the development
of ESG enabled SCF programs:
1. Standard framework: The non-existence of a
standard framework for this type of program still
generates questions about the ESG certification
for the implemented solution. There are open
questions about the factors and weights that
must be considered as part of the framework.
What happens if a company has a very robust
system that reduces carbon emissions by 50
percent, but has a poor internal governance –
can this supplier be an ESG candidate? There
are many ways to promote ESG rating models,
and there are several ratings providers that are
trying to set different methodologies to assess
the ESG eligibility criteria. Companies that want
to implement these programs can select their
own rating methodology, use the rating criteria
set by the SCF provider, or use one of the many
methodologies provided by an external rating
agency. There should be a consensus on a more
standard methodology, in order to provide a
widely accepted framework for sustainable
SCF programs.
2. Data and technology: Assuming that we have
an accepted standardised rating methodology,
how reliable is the data that has been used?
What type of information do SCF providers need
to onboard entities in these programs? Is the
existing information good enough to guarantee
a fair assessment of the ESG factors? How can
technology help us capture the information that
is needed to implement the programs? Regarding
data concerns, the accuracy of the data used
to assess the ESG factors has progressively
improved over time. Digitalisation is helping,
and the current pandemic is accelerating the
transformation to a more digital supply chain.
The development of blockchain technologies can
help capture more data swiftly. The proliferation
of digital on-boarding tools, which we will need to
incorporate ESG measures in the future, can help
create a more efficient process for the validation
of many new suppliers to the program.
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 Specialist Articles

3. Government, regulation and stakeholder

engagement: To ensure the maximisation
of benefits to all parties, and to ensure the
legitimacy of these programs, it is critical to
get regulators more actively involved in the
development and monitoring of ESG SCF
programs. For instance, if banks providing this
service can obtain a more favorable capital
treatment associated with more sustainable
programs, they can transfer that benefit in the
form of a more competitive discount rate to
eligible suppliers. These regulations can also
ensure that the robustness and compliance of
these frameworks are delivering the benefits to
society as intended; tax incentives for suppliers
and buyers developing EGS practices would
facilitate and promote the right behaviors in a
very similar way.

To get the most accurate information concerning

sustainable behaviors, a great degree of
involvement from credit rating agencies,
regulators and auditors is essential. Reporting
obligations from entities about ESG would
help significantly in this matter. Although there
is still a long way to go, credit rating agencies
are giving further importance to this topic,
which is evidenced by S&P acquiring the ESG
ratings business from RobecoSAM and Moody’s
Corporation acquiring a majority stake in Vigeo
Eiris. ESG factor information from these agencies
will be very supplementary to the current credit
rating process.

Considering these challenges, does it make sense to

work on these programs now? From an economic
standpoint, getting started now will provide a
significant economic incentive and create a business
opportunity that has been estimated by BSR to be
about USD 6bn in revenues. The societal pressures
of not being part of the solution to the world’s
environmental, social, and governance issues can
be equally compelling. Large corporates and their
smaller trading partners, along with banks and other
key stakeholders, should take on the challenges in
front of us in order to build a better supply chain and
ultimately a better world.

28

Institutional investment in supply
chain finance: approaching a point
of inflection
Supply chain finance (SCF) has
become increasingly fashionable
within institutional investment
circles since the financial crisis
of 2007-2008. Though non-
bank capital still provides just
a fraction of global SCF, an
emerging class of funds has
begun to help a broad array of
institutional investors lay claim
to a greater share of the market’s
USD 25+bn revenue pool.
T
oday, the COVID-19 pandemic’s continued
assault on the global economy offers SCF
funds both a critical first test and precious
opportunity. Whether these nascent
investment vehicles deliver consistent
returns throughout a period of sustained financial
market turbulence will weigh heavily on near- and
medium-term institutional enthusiasm for the asset
class. Success would serve to many investors as
validation of the SCF investment hypothesis and set
the stage for dramatic growth in SCF fund assets
under management.
Specialist Articles
Jolyon
Ellwood-
Russell
Partner
Simmons &
Simmons
Bos Smith
Managing Director
BroadRiver Asset
Management
Recognising that the COVID-19 era is poised to
become a point of inflection for their young class of
funds, we expect SCF portfolio managers to buttress
the downside protections inherent to their asset class
through the employment of increasingly conservative
credit underwriting strategies.
Emergence of an asset class
The emergence of SCF as an investible asset class is
largely a phenomenon of the past decade, over which
time converging forces have materially increased
the availability of SCF assets (commercial accounts
receivable for sale at a discount) to non-bank
institutional investors.
The most fundamental of these forces has been a shift
in international trade toward ‘open account’ terms,
under which goods are shipped before payment is
due, and suppliers assume the credit risk of their
customers. Made possible by maturing trading
relationships and enhanced transparency throughout
global supply chains, open account transactions, by
definition, forgo the risk mitigation solutions provided
by traditional trade finance products (i.e., performance
guarantees, letters of credit, documentary collections,
etc.). Yet, the need for trade finance solutions to bridge
the gap between the time at which the suppliers want
to be paid (at the time of shipment) and the time at
which buyers want to make payment (perhaps 30, 60,
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 Specialist Articles
How is the demand for trade finance products changing?
Exhibit 1. Responses of financial institutions and corporates surveyed in 2019 by
Boston Consulting Group and SWIFT (with support from the International Chamber
of Commerce).
Trade finance default rates
Exhibit 2. SCF (2018 and 2017) and traditional trade finance products (2008-2018).
Figures based upon data contributed to the ICC Banking Commission by member
banks of the International Chamber of Commerce.
or 90 days after delivery) has remained. This
demand has increasingly been met by SCF, which
now represents approximately half of the trade
finance market.
Increased demand for SCF might have been
adequately satisfied by multinational banks, which have
long dominated the traditional trade finance market
and, as recently as 2005, according to McKinsey &
Company, managed 95% of SCF programs. But
post-crisis regulatory forces have increased capital
and compliance costs of trade finance, causing banks
to respond by embracing an 'originate and distribute'
30
model and withdrawing from relationships, most often
with small and medium-sized enterprises, that generate
insufficient revenues to offset rising compliance costs.
Both have created opportunity for other sources of
institutional capital.
Seeing an opening, specialised portfolio managers
have begun to launch dedicated SCF funds targeting
non-bank institutional investors. Early-stage growth
for these funds has been modest as managers have
had to educate capital allocators, a majority of whom
(according to a 2018 survey by the International
Chamber of Commerce) consider a ‘lack of
understanding of the product and associated risks’ as
a ‘significant challenge’ to entry into the asset
class. Evidence suggests, though, that SCF funds are
gaining traction.
Investor interest in SCF often reflects a willingness to
trade liquidity for yield. Institutions holding more
capital in cash or money market positions than truly
needed in same-day liquidity might allocate a portion of
such holdings to a SCF fund. Whilst such a trade might
also increase credit risk held by the investor, trade
finance has historically been regarded as a low-risk,
routine operation.
At a fundamental level, trade finance facilitates
commercial transactions between willing sellers and
willing buyers. The underlying presence of parties eager
to transact, often regularly over the course of months or
years, suggests, on its own, that financed transactions
should generally enjoy a high completion rate. Credit
risk to financiers, though, is further mitigated by
structural attributes of the originated assets. SCF
assets, in particular, are short-term (often maturing in
less than 90 days), self-liquidating (converting to cash
upon payment of an invoice in the ordinary course
of business), and associated with multiple layers of
recourse (potentially to the seller’s assets, the invoiced
goods, or credit insurance proceeds).
The ICC’s Trade Register is the industry’s primary source
of empirical data on trade finance default rates. The
annual reports have largely substantiated the 'safe
and secure' reputation of the asset class. Reported
exposure-weighted default rates for traditional trade
finance products have consistently ranged from .03% to
.25% and showed no evidence of deterioration during
the global financial crisis. Reported SCF default rates
(added to the Register in 2017) have been even lower
(see Exhibit 2).

In this context, initial investors have entered SCF funds
expecting to enjoy a safe, though somewhat less liquid,
alternative to lower yielding cash and money market
holdings. The arrival of COVID-19 and the economic
disruption associated therewith will challenge this
thesis, while providing SCF portfolio managers a first
opportunity to demonstrate the resilience of the
asset class.
Demonstrating the resilience of SCF
assets
SCF funds that avoid credit defaults and deliver
steady returns through the COVID-19 recession and
its aftermath will be well-positioned for post-crisis
growth. The importance of building a recession-era
track record consistent with investor expectations has
not been lost on portfolio managers, and we expect
them to be increasingly attentive to principles and
procedures of conservative asset management.
SCF assets carry credit risk. That is to say, if the obligor
on an accounts receivable is unable or unwilling to pay
the amount due on the date that such amount comes
due, the owner of the accounts receivable will generally
experience financial loss. Among commonly employed
credit underwriting procedures, portfolio managers
are most likely to alter those related to the following in
account of current economic conditions.
1. Balance sheet
The short-term nature of trade receivables (most
have lives of 90 days or less) and the fact that SCF
investors rarely make forward purchase commitments
allow for the credit underwriting process to focus on
the obligor’s jump-to-default risk. Here, underwriters
evaluate two favoured metrics; the first is the obligor’s
current ratio, defined as short-term assets divided by
short-term liabilities. While satisfactory ratios vary by
industry, underwriters generally consider ratios of 1.5
or higher to be indicative of an entity’s ability to meet
short-term cash needs.
The second, a bit more subjective in nature, is the
strength of the relationship between the supplier and
the obligor. Underwriters prefer to see a sustained
period of transaction history and both parties
occupying a position of relative importance to the
other. Specific matters of significance include the
length of time over which the parties have transacted,
the volume of current transactions between the parties
relative to their overall sizes, whether transactions
Specialist Articles
between the parties involve the purchase and sale of
products core to their businesses, whether the parties
have established a regular pattern of order, fulfilment,
and timely invoice payment, and other matters of
the sort.
Under ordinary market conditions, SCF portfolio
managers give great weight to the second metric.
Where a supplier and obligor have established a
sufficiently solid relationship, portfolio managers are
often lenient in their review of the obligor’s balance
sheet. The disruption brought by the pandemic has
led one major credit rating agency to project a 35%
increase in global insolvencies from 2019 to 2021. As
a result, we expect SCF portfolio managers to place
less reliance on a continuation of 'business as usual'.
Instead, they are likely to increase the rigor of their
balance sheet reviews, looking for sufficient liquidity
to meet short-term obligations, even in the event of
severe sales disruption.
2. Transaction data
SCF funds generally acquire assets pursuant to a
program under which a certain supplier regularly sells
accounts receivable, payable by a certain obligor, to
the fund. Though programs generally do not involve
commitments by either the supplier (to sell) or the fund
(to purchase), they can run for years, with the supplier
selling a receivable to the fund upon each sale of
product to the obligor. In fact, without an expectation
Changes in insolvencies by 2021
Exhibit 3. Changes in insolvencies by 2021 for selected countries (2021 data
compared to 2019 data). Figures based upon data collected and reported by
Euler Hermes.
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 Specialist Articles
of a continued stream of receivables available for
purchase, portfolio managers would generally find
the cost of underwriting and documenting the initial
investment to be prohibitive.
Because of the regular, repeating nature of receivable
sale and purchase transactions pursuant to SCF
programs, SCF funds enjoy access to 'real-time'
procurement data that can send important credit-
related signals. SCF portfolio managers are privy to
changes in order quantities, production times, return
allowances, and payment performance. Such data can
provide evidence of an obligor’s deteriorating ability to
meet its short-term obligations months before evidence
of hardship arises through the publication of financial
statements or actual credit default.
In late 2020, a survey conducted by Euler Hermes
of American and European executives found that,
of the approximately 1,200 represented companies,
almost all (94%) had experienced coronavirus-induced
disruptions to their supply chains, and for several (17%)
such disruptions had been 'severe'. We expect portfolio
managers will rely upon transaction data to identify
those supply chain disruptions that threaten the credit
quality of their portfolios.
3. Weighted average asset term
The term of an accounts receivable (the number of days
until payment is due) affects its credit quality, and – all
else equal – SCF portfolios with the shortest weighted
average asset terms are the safest. Regrettably,
accounts receivable terms have begun to face outward
pressure as customers increasingly demand longer
payment terms from their suppliers to help finance
growing liquidity needs.
Fearing supply chain disruptions, firms are stockpiling
inventory. At the same time, weak end-user demand
(in certain industries) has negatively affected product
sell-through rates. The result has been a substantial
uptick in global firm working capital requirements. As
estimated by Euler Hermes, global days working capital
(the number of days it takes for a company to convert
its working capital into revenue) will increase by 5 days
to 74 days during the first year of the pandemic.
Commercial necessity often compels suppliers to grant
the invoice term extension requests of their customers,
particularly amidst a recession. As the ripples of
such concessions begin to shake SCF portfolios, we
expect portfolio managers to increasingly focus on the
32
maintenance of their assets’ weighted average term in
the selection of receivables for purchase.
4. Credit insurance
Holders of accounts receivable often purchase credit
insurance to limit potential losses associated with
obligor defaults. Economic conditions, though, can
materially impact the availability and price of such
insurance. The industry is dominated by a small
number of carriers, with three – Euler Hermes,
Atradius and Coface – sharing approximately 80% of
the market. Bearish sentiment by one can materially
alter the market landscape.
SCF funds regularly purchase credit insurance,
sometimes as required by their constituent
documents, other times at the discretion of the
portfolio manager. In either case, credit insurance is
an important component of SCF fund risk mitigation.
As the big three carriers publicly express their
expectations of increased default rates in 2021
and a return to pre-crisis economic conditions no
earlier than the fourth quarter of 2022, we expect
portfolio managers to be increasingly engaged with
the underwriters of their insurance policies. Proactive
managers can have a material impact on underwriting
decisions by demonstrating diligent portfolio oversight
and concern for the carrier’s associated risk.
Conclusion
SCF has emerged as an investible asset class in the
decade following the global financial crisis. Attracted
by the prospect of secure, short-term yields in excess
of money market alternatives, a modest, but growing,
pool of non-bank institutional capital has entered the
market through a collection of young SCF funds.
Portfolio managers of these (mostly) fledgling funds
recognise the opportunity provided by the COVID-19
recession to demonstrate the resilience of accounts
receivable to an institutional community only beginning
to embrace SCF as a short-term investment alternative.
We expect these managers to implement increasingly
conservative investment underwriting procedures
as the economic disruption endures. Should they
succeed in maintaining asset default rates near
historical averages for the asset class, the COVID-19
recession will likely become a point of inflection for
institutional investment in SCF.
Regional
Articles

33
 Regional Articles

Cliff
Entrekin
Managing
Director

Convergence
Capital Group

CEO Asia*
Convergence
Trade Key drivers of SCF evolution in Regulatory innovation and government
Solutions Asia Pacific initiatives

W
hile developed markets - such as
the United States and Europe - have
institutionalised the key concepts of
supply chain finance, many of the
smaller, segregated markets in Asia
Pacific have often been looked at as a blank canvas in
which to build upon, and even challenge the prevailing
best practices of the West.
We are seeing three main drivers as the catalyst
for the evolution of SCF in Asia Pacific:
1. Regulatory innovation and government initiatives
*
Excluding China.
China is covered in 2. Emergence of non-bank lenders
a separate article
on page 37. 3. Support from development finance institutions
In the west, financial regulation normally follows
product innovation. However, we are seeing much of
the developments in Asia Pacific being driven through
regulatory innovation.
India is one of the pioneers in the region, with the
Reserve Bank of India’s (RBI) backing of the country-
wide Trade Receivables Discounting System (TReDS)
which seeks to tackle many of the key challenges of
implementing a successful SCF program. One of those
major challenges is gaining the full support of the
anchor buyer in implementing the program, which
usually calls for an underlying need for working capital
(i.e., payment term extensions for suppliers). To facilitate
the swift adoption of TReDS, the central government
enacted a mandate calling for every large corporate
with revenue above Rs 500 crores (roughly USD 68m)
to be onboarded to TReDS and enable access to
approved supplier invoices. This allows for all of their
MSME vendors to access financing through a network of
lenders who bid on these approved payables. Another
challenging aspect is successful supplier onboarding,
adoption, and utilisation. However, crucial advances
were made by the RBI to remedy this, such as the
standardisation of KYC requirements for suppliers,
allowing KYC activities to be performed by a third party,
and results shared amongst participating lenders. These
key actions alone have led to great success in the first
24 months of the launch of the TReDS initiative, with
over 35 lenders participating and over USD 1bn in
financed invoices facilitated.

While the potential for fraud is rare with SCF programs,

there were some prevalent cases seen throughout the
pandemic, and fraud remains a key point of concern
in Asia Pacific. To rectify this, the RBI has provided a
central repository on the TReDS network in which three

34

approved platform providers are directly integrated,
providing a fraud verification check for any duplicate
invoices across all platforms. The idea of a central
repository of invoices (and movable assets in general)
is in the process of being adopted by other Asian
countries, such as Singapore, the Philippines and
Thailand. Malaysia has even built a prototype registry for
trade assets by connecting nine banks via distributed
ledger technology, known as Spyder.
The Bank of Thailand (BOT) is looking to replicate a
similar TReDS model within their country for launch in
2021. Their goal is to provide a regulatory environment
for a thriving digital ecosystem of technology providers,
corporates, and funders. However, a key improvement
to this model, in comparison to TReDS, is the provision
of risk mitigation and credit insurance enhancements.
There are challenges that persist with technology
innovation as well. Regulations ordering that SCF data
must be held within the country in key markets,
such as Indonesia and Pakistan, hinder the use of
market-leading cloud-based technologies from overseas
vendors. However, with innovations around distributed
ledger technologies and the use of local machines
to hold ‘blocks’ of data, there is a potential path for
international technology vendors to be in compliance
with the regulations of the State Bank of Pakistan
(SBP) and Otoritas Jasa Keuangan (OJK), the monetary
authority of Indonesia.
With the continued support of governments throughout
Asia Pacific, SCF innovation will continue to flourish and
offer a heightened level of cooperation and efficiency.
Emergence of non-bank lenders
Asia Pacific has had an ongoing rise in non-bank lenders
in the form of non-bank financial Institutions (NBFIs)
operating in the region as well as Peer to Peer (P2P)
fintech platforms, in order to facilitate both domestic
and cross border SCF.
Regional Articles
The growth of SCF-focused P2P platforms has
accelerated in the Asia Pacific region, due to the
following reasons:
1. Direct coordination with monetary authorities, such
as the case of TReDS and the Bank of Thailand
initiative underway
2. Indirect incentives adopted by monetary
authorities in certain countries, such as significantly
lower capital requirements and less stringent
licensing regulations for starting a P2P business,
rather than a NBFI
3. Lack of a regulatory framework in certain emerging
markets for governing P2P, while the framework to
govern NBFI in those same markets resembles that
of banking regulations.
While P2P lending has had significant growth, these
platforms can be categorised into two distinct groups,
domestic and cross-border models.
The domestic P2P model is highly growth-focused,
tailored to small domestic market transactions and
often coordinating investment through high-net-worth
individuals (HNWI). These P2P platforms most often do
not take on any risk, are highly automated technology
players and often lack much of the detailed due
diligence and credit assessment capabilities of a NBFI.
Their focus is often ‘quantity over quality’ and have a
higher-than-normal acceptable rate of non-performing
loans, due to the smaller ticket size and diversification.
The cross-border model of P2P lending focuses on
distributing funds primarily from NBFI. These P2P
platforms employ credit risk enhancements such as
trade credit insurance, and often provide some of their
own capital to ‘share in the risk’. They focus on ‘quality
over quantity’ and their processes often resemble
those of NBFI themselves. While the second model is
more refined, their ability to provide credit lines for
SCF programs in 2020 has severely diminished due to
multiple credit insurance providers exiting or reducing
their exposures in Asia Pacific markets since the
Coronavirus pandemic began.
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NBFI were heavily increasing exposures in Asia prior
to the pandemic as well. Lack of credit insurance over
the course of 2020, however, has also obstructed their
efforts to support SCF programs. More specifically
though, large, cross-border factoring companies have
become increasingly active in the SCF space during the
coronavirus pandemic, as large credit-worthy retailers
had to shut their doors for months but wanted to honor
the purchasing commitments they had made to their
supply base. We saw some multi-national brands and
retailers extending terms from 30 days to as much as
180 days while coordinating with factoring companies
and other NBFI on the additional limits needed to
support their suppliers. This occurred particularly in
countries where global SCF banks have had issues
operating in the past, such as Pakistan and Bangladesh,
and were unwilling to extend limits to the fully
required capacity.
With the lack of liquidity and risk appetite available from
many multinational banks to drive SCF programs in Asia
Pacific, the gap in interest rates between banks and
NBFI has become less of an issue for those seeking the
necessary working capital to grow, survive or ensure
supply chain stability.
Support from development finance
institutions
With the support of development finance institutions
(DFI), SCF programs are now able to thrive in emerging
markets amongst non-MNC corporate anchors. DFI are
providing support for local banking partners so they
may deliver SCF solutions, which for most of these local
banks are new product offerings. This support usually
comes in the form of advisory services, funding support,
risk mitigation, or a combination of any of the three.
Asian Development Bank (ADB) focuses primarily on
funding support and risk mitigation with their partner
banks throughout Asia. ADB’s trade and supply chain
finance program (TSCFP) aims to reduce financing gaps
faced by small and medium-sized enterprises (SMEs) to
help them become part of the global trading system.
The International Finance Corporation (IFC) has a
key focus on the SCF space in Asia Pacific supporting
corporates, financial institutions, regulators, private
sector banks, and technology providers primarily for
domestic transactions. IFC currently has SCF programs
at various stages running across Pakistan, Vietnam,
Indonesia, Philippines, Sri Lanka, Bangladesh and
36
Mongolia. “Driving development finance though SCF,
we are providing investment and advisory solutions
aimed at driving inclusion and sustainability. 2021 will
be a breakthrough year”, says Qamar Saleem, Regional
Manager Financial Institutions Group, Asia and Pacific,
IFC, World Bank Group.
We have also seen the European Bank for
Reconstruction and Development (EBRD) supporting
trade finance products with partner banks in Central
Asia, while the insurance arm of Islamic Development
Bank (IDB) has become quite active in Asia Pacific,
specifically in countries associated with the Organization
of Islamic Cooperation (OIC).
The ability for DFI to provide the full breadth of services
such as financial support, risk mitigation, and advisory
services will be a winning combination for banks
operating in emerging markets. Additional support is
needed, however, to extend these services to NBFI and
not just banking institutions.
Conclusion
With the reduction of activity of major international
trade finance banks in Asia Pacific during the
coronavirus pandemic, we will see significant
growth in SCF programs, supported at a local
level by:
1. Continued enhancements to government
regulation
2. Increased participation of non-bank lenders for
both domestic and cross-border programs
3. Greater involvement by local, emerging market
banks, supported by advisory services, financial
assistance and risk mitigation provided by DFI.
While most SCF programs in Asia Pacific were
formerly controlled by large, international institutions,
we are seeing a grassroots effort to mend the trade
finance gap through the support of local intermediaries
and institutions.

China
The supply chain finance market
faces challenges from pandemic
control measures, supply chain
restructuring, and geopolitical
considerations. At the same time,
the funding demand from SmE
and the applications of fintech
create opportunities to grow by
producing more shared value.
SCF market
In 2020, the estimated SCF volume of China is USD
621.71bn growing 5.81% from 2019. This growth can
be attributed to product innovations, the application
of fintech, and policy support from the Chinese
government. Despite the impact of low GDP growth,
the fund demand from SMEs still promotes the
development of the SCF market. Compared with trade
finance, the market share of SCF is much smaller but
with higher growth. ICC reported that more than 30%
of the surveyed banks consider the SCF, digitalisation,
platformisation and fintech to be the priority areas of
development and strategic focus, compared with 16%
for trade finance.
Undoubtedly, the COVID-19 pandemic is one of the
most troubling issues for the world economy this year,
bringing both challenges and opportunities to different
markets and regions. The IMF predicts that China may
experience positive GDP growth of up to 1.9% in 2020,
while it estimates an overall contraction of -2.2% for the
whole of APAC. However, the SCF market faces various
challenges. In addition to their directly negative impact
on the economy, the strict controls that prevent the
Regional Articles
Xiangfeng
Chen
Professor,
School of
Management
Fudan
University
corona virus from spreading has delayed the speed of
goods and services provision, which extends payables
period. On the one hand, the weak economy constrains
the market scale. On the other, the extension in the
payables period promotes the demand for SCF. In China,
the domestic order index, the export order index, and
the fund turnover index experienced a marked drop in
the first quarter of 2020, while the loan demand index
and the bank loan approval index rose significantly
compared to 2019.
Among all the SCF market segments in China, technology
platforms are experiencing the greatest levels of growth
and opportunity owing to fintech. Through blockchain
technology, payables can be digitalised and approved
automatically. In addition to the financing, those digital
bills can also be transmitted and split. Additionally, big
data and AI enable technology platforms to control risks
from SMEs. Taking advantage of digitalisation, the SMEs’
data can be compiled across platforms, which not only
improves information transparency but also lowers
SMEs’ financing costs.
The three major players in the SCF market are banks,
third-party platforms, and core companies. Third-
party platforms carry out SCF solutions based on their
services, such as logistics and warehousing, while the
core companies may offer SCF solutions to their trade
partners. Facing complex supply chains, each one cannot
optimise the SCF solutions without the others. With the
development of fintech such as big data, blockchain, and
cloud computing, banks with low capital costs and core
companies with SMEs’ information can be connected by
third-party platforms.
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 Regional Articles
SCF clients
To look for more comprehensive solutions, financial
institutions and industry should strengthen cooperation
and relationships. The government encourages
financial institutions to increase the use of Internet,
IoT, blockchain, biometrics, artificial intelligence, and
other technologies to cooperate with core companies
to build supply chain financial service platforms.
Financial institutions are also motivated to innovate
online financial products and services to meet financing
demand more appropriately. As a result, some
industries will increase their investment in technology,
or cooperate with third-party fintech companies
to establish a supply chain financial platform. Such
cooperation can in turn drive up the innovation in
fintech products, optimise credit financing, and realise
credit transfer between enterprises in the supply
chain, thereby improving the efficiency of capital flow
in the entire supply chain. Similarly, some industries
cooperate with logistics companies, which provide
agency procurement and agency selling for the related
industries to establish an industrial chain ecosystem.
Do client demands favour more sophisticated solutions?
In theory, the application of more sophisticated
solutions - such as blockchain technology - will shorten
transaction times, greatly improving operational
efficiency. In addition, blockchain technology can ensure
that data in the chain cannot be tampered with, thus
reducing the operational risks in the supply chain.
It can realise point-to-point communication among
all parties in the supply chain, effectively integrating
the chain’s upstream and downstream information.
However, at present, many clients still have concerns
about the adoption of sophisticated solutions
because they are worried that too much information
disclosure will reduce their competitive advantage in
the market, and thus have a negative impact on their
operations. Consequently, the huge market demand
for supply chain financing in some industries does not
necessarily lead to the adoption of more sophisticated
solutions. For a healthy development, legal supervision
from government or industry is necessary. Either
the government or the industry needs to establish
an incentive mechanism for data sharing among
companies throughout the whole supply chain, as
well as a corresponding punitive mechanism to deter
companies from uploading false data. The government
should also encourage core enterprises and fintech
38
companies to increase investment in the research and
development of new technology, and to change the
existing transactional structure of the supply chain.
New technologies also speed up the development
process of local industry towards noninvestment grade
companies. Intuitively, noninvestment grade companies
have less of an opportunity to gain investors’ favour
because they have high operational risks. In SCF, based
on the traditional financing scheme, it is not easy for
a company with poor credit rating to obtain financial
services from a financial institution: this impedes the
development of local industry. With the increasing
application of blockchain and big data technology,
financial service providers can assess the credit rating
of small enterprises both upstream and downstream
in the supply chain. Based on the reliability of a large
company, some enterprises with poor credit rating can
obtain the necessary financing through effective orders
from large companies in the supply chain. A large
company can be regarded as one that can share the
risk with capital-constrained companies, or those with
poor credit. This can greatly improve the operational
efficiency of local industry.
SCF implementation
Difficulties in implementing SCF include lack of
comprehensive information on suppliers, mismatch
between the SCF products offered by banks and the
services needed by suppliers, the high cost of operating
SCF businesses. Therefore, the key to a successful SCF
program is to establish an ecosystem that connects
the supply side with the demand side through low-cost
techniques. This ecosystem incorporates advanced
technical tools into the transaction nodes across the
supply chain to improve efficiency and reduce operational
costs. The most prominent format of an SCF ecosystem
is an SCF platform that acts as an intermediary between
suppliers seeking financing and investors searching for
investment opportunities.
To onboard small suppliers and make SCF programs
more efficient, the platform takes advantage of network
effects. Suppliers have more incentive to participate in the
platform. By introducing good-quality suppliers to banks,
the platforms are able to attract money from the financial
market, thus enticing more suppliers. Another approach
for onboarding small suppliers is already commonly used
by focal companies within the supply chain. These focal

companies cooperate with banks to provide financing for
small suppliers as an optional reward for suppliers with
good quality and on-time delivery.
Comparably, onboarding large suppliers is different
because they have access to a wider category of SCF
services (including factoring and inventory financing),
while small suppliers commonly take credit loans as
sources of financing. Therefore, to onboard large
suppliers, the SCF implementors must have a more
extensive product line, which requires a higher ability to
control associated risks.
The emergence and application of advanced technologies
in the SCF market facilitates SCF implementation
by lowering operational costs and improving risk
management. Big data are used to classify different
categories of suppliers into hierarchical levels of default
risk. SCF implementors also apply advanced IoT and
order-tracking systems to reduce the risk of fraud,
which frequently occurs in inventory financing. Similarly,
blockchain technology is valuable for confirming the
authenticity of businesses and protecting information
confidentiality in factoring. These techniques, combined
with machine learning, assist in lowering the cost of
risk detection and management and eventually lower
suppliers’ interest rates.
Future of SCF
Digital developments and fintech have significantly
influenced the industry and the market, with online
service becoming a major trend in the future
development of SCF. Traditional markets are easily
affected by time and location constraints; however,
innovations in payment methods and the application
of online credit payment vouchers break such physical
restrictions. The rise of e-commerce platforms and the
improvement in the understanding of supply chain
dynamics have promoted the rapid development
and growing focus on supply chain financial services.
At present, many traditional supply chain financial
institutions have gradually formed B2B supply chain
financial platform projects. Digitalisation has greatly
broadened the scope and boundaries of SCF.
The accounts receivable digitisation and circulation
system, which is based on the supply chain ecology and
demonstrates a practical use of blockchain technology
to realize the digitisation and circulation of core
Regional Articles
enterprise accounts payable (the accounts receivable
of its suppliers), is also an efficient recent application
of fintech. This technology will be further developed to
speed up the invoice approval process, ensure on-time
payments, improve the system’s visibility, and strengthen
capital management. The system supports the transfer
of digitised accounts receivable among suppliers at all
levels, financial institutions, and external funds, including
commercial factoring companies, commercial banks,
and other financial institutions and SPV.
Thanks to financial technology, SCF will undergo
the following changes: (1) The trend toward smart
development, from product design to implementation,
management, risk control, and other aspects of
digitalisation to move toward intelligence; (2) Continuous
innovations of risk control methods and continuous
expansion of service scenarios. Fintech like blockchain,
with its qualities as a decentralised, secure, and
tamper-resistant technology, effectively improves
information safety, reduces moral hazards, and may
solve the problem of adverse selection in the supply
chain. Service suppliers would continue to expand from
internal services to social services or develop various
service scenarios. Ultimately, these changes will
inspire new formats of supply chain financing, such
as the creation of a shared financial platform that is
circulated, financed, and detached with standardised
confirmation certificates.
In future, with the evolution and transformation of the
global supply chain, SCF should be further developed.
Service suppliers should focus on providing distinctive
supply chain financial services based on sustainable
development ideas while allowing participants to actively
participate in two aspects, forming an ecological service
circle based on a win-win strategy. With the advances in
fintech, many supply chain financial service models and
products have become more homogeneous. However,
innovations toward specified industry characteristics
and practical development can achieve product
differentiation. It is also essential to combine sustainable
development concepts and values to promote the
sustainability of the supply chain and enhance its overall
competitiveness. Ideally, the development process will
rely on a pyramid model: the bottom layer represents
service compliance, following international rules and
regulations; the middle layer, sustainable development;
and the top layer, creating shared value for both
stakeholders’ economic and social values.
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 Regional Articles

Eugenio
Cavenaghi
Managing
Director

Head of
Working Capital
Solutions,
Continental Europe
Europe

Banco Michael Bickers talks to Eugenio M: You've said that you've had to put
Santander S.A. Cavenaghi, Managing Director, arrangements and structures in place more
quickly than you have in the past; so, has
Head of Working Capital the urgency of putting some of these
Solutions, Continental Europe, facilities in place for new customers

Banco Santander. presented any issues?

E: Yes; we have customers that were previously

M: How has the current situation been
impacting you in terms of new business? Are
you still getting new inquiries, and are you
going out to get new business? Has it changed
at all in the last few months, during COVID?
E: Yes, it has changed, and it has actually boosted
business. This is because we now have a number
of companies that had working capital facilities
in place before the crisis, and because of the
crisis, the utilisation went up a lot, so we had a
lot of requests for increases. But in general, say,
wherever we had limits that used to be far from
being fully utilised in previous years, this time
they got fully drawn. Additionally, a lot of other
companies that had not thought about supply
chain finance seriously or did not prioritise it, then
suddenly it became a big priority for them. As a
result, we were rushed into implementing a few
programs, and we didn’t expect this to happen so
quickly. It was really a necessary measure for them
to cope with a lack of liquidity on their side, and on
the supplier side, too. In the last few years we have
grown, but this year, COVID-related, I think we have
boosted the growth, resulting in double the pace
that we would normally have.
looking to have a longer planning phase, and a
fully automated process and full scope in terms
of geographies, systems, divisions and countries
- connected to a program. Most of them said they
didn’t have enough time to plan and preferred to
start in a pragmatic way - let's go live wherever
we can go live; then we work as we go, optimising
the processes and expanding the scope as we can
etc. So, it was always a trade-off between quick
implementation and immediate help versus a more
sophisticated implementation. Most clients decided
to start easily as speed was more important than
other factors.
M: And has that worked well?
E: Yes, it has. Historically, a bottleneck with
implementation of projects has always been
availability of resources and prioritisation on the
client’s side, but since they were the ones pushing
this time, it worked out fine.

40

M: I wanted to ask you when coming out of
COVID and when things get back to normal,
do you think that will be the new process -
that you will get a facility in place as quickly
as possible, and you will then do all the
adjustments and fine tuning after that? On the
other hand, I suppose you might not have the
same kind of demand afterwards, so perhaps
that might not happen. What do you think is
likely to be the situation?
E: I think we are learning to be quicker and nimble
and this is something that will remain, so we can
certainly use again. We had a project where it took
us 10 days from the initial conversation to first
discount to put everything in place. So obviously,
when you do that you realise that there are so
many opportunities to accelerate activities, and that
is an asset that you can keep using again. So, it is
here to stay.
M: In that example, from nothing to being able
to provide finance in ten days, how long would
that have typically taken a year ago?
E: That would have taken several weeks, probably.
It's difficult to put a number on it because it
depends on the availability of client resources, but
in this case, they were available, we were happy, we
were fast and everything was fine.
M: I am going to move away from the topic of
COVID for a moment and look at some other
areas that might be impacting the sector. Is
there any impact in terms of the trade wars
situation and protectionism on a global basis?
Particularly the situation between China and
the US, and all the ramifications that's causing
around the world.
E: We do have big global programmes in place
where we already have interchange between China,
Europe and the US. For our business, since we are
on a global basis, and we also cover both the cross-
border flows from China to the rest of the world
and then domestic China, we didn't really see a high
level or major disruption in the volume of business,
because even if some flows were redirected, for
example, when cross-border became domestic
flows, we just captured them by way of substitution
because we can cover both.
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M: So, there has been some rerouting
essentially, which hasn't really impacted the
supply chain finance programs as a whole.
E: Yes, I would say so. I think a bigger impact was in
the different timings of the shutdowns during the
year. For example, the automotive sector volumes
in Q1 in China were extremely low, because they
had a very tough lockdown there at the beginning
of the year and everything was closed, so you could
tell by the levels of utilisation, that throughout
those months nothing was happening in China.
It then picked up very quickly again, but then it
rapidly slowed down on the other side because the
lockdown had finished in China, but had started in
Europe, so that was much more of a visible impact
on business.
M: Which sectors have been impacted by
COVID-19: you said there has generally been
a significant upturn in business, so have you
seen this more in some sectors than others?
E: Automotive was negatively impacted when the
factories were shut down: for one factory that
closes down, you have hundreds of suppliers that
more or less need to stop their activities. The
transportation sector has also been very heavily
impacted and any ancillary businesses such as
retail, airports and stations have also been heavily
impacted. Conversely, sectors that flourished
were food retail and anything that has to do with
e-commerce.
M: What about the general risk environment?
How have you seen that play out in terms of
the crisis, and has there been any change in
terms of the status of blue-chip corporates as
a whole for example?
E: Clearly, it's more of a risky world for everyone.
Nobody would have thought that a pandemic
is coming, and this has created all sorts of new
issues. Having said that, the risk profiles are very
diversified: there are certain companies that are
performing even better in the current environment.
This could be because they have a business model
that is less impacted or even flourishing, or because
they offer more online, or because they are not
too dependent on sectors that are impacted by
the lockdown. And there is a flight to quality, so
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there's still a lot of liquidity for investors to pour in.
However, they tend to concentrate on companies
that are faring very well and not those that have
a deteriorating risk profile. As to which sectors
have been doing well and which sectors have been
suffering - you can tell from the actions of the rating
agencies, it's very clear that they are keeping an eye
on impacted sectors.
M: And what about pricing? How has that been
throughout the last few months?
E: Pricing has followed risk perception. So in
general, I would say that pricing adjustment in the
last 12 months has been towards the upper end of
the range, compared to previous years.
M: Has there been any development in supply
chain finance within mid-tier banks?
E: In general, I think we have seen a very wide
participation of banks for the trade finance
products. Some of them have primary origination
now that they have discovered that this is a
business area for them, so they are now investing
in their own teams and products. There are
many others that are happy to participate in the
secondary market. So, they can participate in
facilities that are set up by others.
M: Have there been any new developments
in technology? Anything that COVID has
precipitated within supply chain finance?
E: I am not too sure. All the advances that have
been done in the last year, they have come to
fruition this year, because this is a year where the
demand for supply chain finance solutions was very
high. What we realise from our side is that there is
a lot of interest for perhaps two kinds of products
that I feel are somewhat in the development: one
is pre-delivery finance - as in how can I get money
to my suppliers early, even before they have
delivered anything? This is something we are trying
to address. Using big data statistics and things that
help us make use of the data to take an educated
guess on the amount of a purchase order that we
can finance before shipment, without putting the
bank at risk too much.
42
The other product is what we call equipment
finance, or asset as a service kind-of product.
This is particularly true in the industrial sector,
where there is traditional machinery and industrial
equipment, that is now being sold more and more
as a package. It is not just physically delivered and
installed, but they also deliver an ongoing service
over a period of time. It is all about maintenance
and use of the data and Internet of Things, to
improve the efficiency of production, ongoing
consulting, on-going optimisation. This service
package becomes something that can be financed
over a longer period of time, for two, three, four
or five years. So, the asset is the machine, but it's
being sold with services attached to it and we're
finding ways to finance that over a longer period
of time.
M: My next question is about the position
with balance sheet recognition treatment,
regarding the issue that was raised by the
Moody's report some time ago. Has that
moved forward in any way? I have heard
people are forecasting that there are going
to be changes and implementations by their
treatment.
E: There was an official inquiry to the IFRS
Interpretations Committee, who concluded that the
existing IFRS already provide an adequate basis for
an entity to determine the presentation of liabilities
that are part of reverse factoring arrangements,
and whether or not this should be disclosed in
the notes. So that's good news for the industry,
since the most authoritative body has formally
considered the matter and took a view that no
change in the accounting framework is required.
M: My next question is about onboarding. Are
we now generally getting to the long tail of
suppliers, or not? I know this is a question
which is often linked heavily to technology,
but are we seeing all or more of the smaller
suppliers being onboarded than we used to?
E: I would say so. Certainly, as one of the banks
that has always kept an eye on small suppliers as
well, they have always been welcome in respect of
our facilities. We have found ways to simplify the
process in a way that everybody can join without
a big effort, and it is also a requirement of most
of the buyers. They say that they want a program

that is fair and accessible to all layers of the supply
chain, so that's what we do. We know it is not a
common position across all of the market players
for many years now. We have seen other players
that have done their cost-benefit calculations, and
are instead becoming even stricter in defining what
is the minimum size of a supplier, because the
small suppliers are considered more inefficient
for them.
M: But that is not a sustainable strategy
is it? Because that is really going to push
these corporates to look elsewhere, to other
providers like you or Greensill perhaps.
E: Yes, I agree. We have come into some programs
because there were supplier limits in place in terms
of the annual turnover for them to be onboarded,
and we didn't have these limitations. Okay, so it
depends a bit on the priorities of the buyer. But
if this is an important pointer, which in a good
number of cases it is, then they should really look at
what the strategy of the provider is here.
M: What about multi-bank deals? Are you
seeing an increase there or decrease? What’s
happening there generally?
E: I think big deals are often multi-banked. I would
say it is a common thought amongst clients.
Whenever we pitch for a deal, normally we also
have a concept of how to make it multi-bank for
the client so that they can involve their relationship
banks, and they can have some perspective of how
easy it is to expand. We normally at least have a
strategy or plan for the bank, and then whether
we do it or not depends on the preference of
the buyer.
M: In terms of market penetration, the
impression I have got over the last couple
of years is that most of the large blue-chip
corporates have now got some kind of supply
chain finance structure in place. If this is true,
are you seeing the market saturated in any
way in terms of blue-chip clients?
Regional Articles
E: I think there are certainly less and less that
have not done anything yet, but there are still
enough out there that have started making a
move, so I think there is still enough room to grow.
One interesting thing we are seeing is that now
more and more corporates are thinking of linking
their supply chain finance programs to their ESG
strategy. Supply chain finance can be used to track
the ESG scoring of suppliers and give incentives to
the ones that improve their scoring over time. This
is a new concept that we are also happy to propose
to clients, and we do have some blue-chips that are
starting new programs or during existing programs
that are ready to give it an ESG character that it
didn't have before.
M: Do you have any other comments or
general remarks about the state of the market
in Europe?
E: There are a few exceptions but most of the
new facilities or new projects we start are pan-
European. Corporates - even the ones that
used to have a decentralised approach to their
management systems - are now demanding that
supply chain finance is seen more as a regional
initiative. They have their subsidiaries under good
control, and the facilities that are implemented
are well organised with headquarters coordinating
across everyone. The aim is to have a centralised
approach to the processes, to the flows and to the
system connectivity, quite possibly also to the trade
risk view across the different subsidiaries.
M: Is this falling in line with the general trend
towards deglobalisation that we have seen
beginning to happen in the last year or so?
E: I think it is more of a reflection of payment
factories and share service centres being built and
developed. That also makes it possible to run large
programs across the whole region from a single
location. It is more of an efficiency thing, really.
43
 Regional Articles

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 Regional Articles

Samir
Moorjani
Head of
Working Capital

North Execution
& Program

America
Management

Kathleen
Mooney
Supply chain resilience: strong comeback. Goods-based trade was
the road ahead significantly impacted by the strain on manufacturing
Head of Core
and shipping lines and is rebounding. Services Trade Solutions

I
f there is one thing this year has taught us, it
is that it is never too early to prepare for what
may lie ahead. While navigating the unknown
has been a need of the hour, no one could have
predicted how 2020 would turn out. On the one
hand we have seen the pandemic wreak havoc on
the global economy, but on the other, we have also
been surprised by how people and companies have
stood up to the challenge and shown true grit and
resilience in managing the impact, with trade flows
in parts of the world - especially in Asia - making a
trade has seen a divergent impact within the space.
Tourism and business travel have all but ground to HSBC
a halt, given global travel restrictions, and with cases
once again on the rise, it is very unlikely that travel
(particularly international) will rebound any time soon.
However, digital trade has seen an acceleration, with
cloud-based services and remote working driving the
demand. Prolonged restrictions and lockdowns will
only continue to increase the relative importance of
digital services trade and highlight the opportunity to
improve digital infrastructure, in order to support this
greater international flow.

45
 Regional Articles
While the United States continues to bear the
heavy burden of the virus, with vaccine distribution
picking up, there is a lot that needs to be done to
reverse the economic impact of COVID-19. However,
the time is now to ensure that companies are
prepared; not only for future upheaval, but also for
the demand that may likely come roaring back. The
companies that survived the dot-com bubble that
burst twenty years ago were the ones with sound
business models and the ability to meet the demand
that eventually returned.
At HSBC, we saw four phases impacting trade during
the COVID-19 crisis:
•  upply Shock – the period when manufacturing
S diversification and some redundancy in the sourcing
and shipping capacity was heavily impacted by
the shutdowns.
•  SD Liquidity Crunch – the period when
U for single-source suppliers and ensure there is
companies raced to pull all the dollar liquidity
available to them via their revolving credit facilities
and other lending channels. Unlike the financial
crisis where the liquidity crunch was supply driven,
the USD liquidity crunch during COVID-19 was
driven by demand.
•  emand Shock – the period where manufacturing
D to look at their ways of working, and finding
and shipping capacity has started to return, and
order volumes started to surge back up.
•  ecovery – the period where demand normalises
R
and we see a recovery in trade flows.
How can companies build supply chain
resilience?
Based on HSBC’s 2020 Navigator Report that
surveyed over 10,000 businesses across 39 markets,
67% of businesses surveyed want a more secure
supply chain; 60% of businesses expect a return
to pre-COVID-19 profitability levels by end of
2021; 72% of businesses are intending to increase
investment in their business despite challenges;
and 94% of US companies think there are multiple
opportunities for their business from improving its
environmental and ethical sustainability.
There is a need to adopt a multi-dimensional
approach for building both operational and supply
chain resilience. Key areas of focus include:
(a) a focus on mitigating risk and on diversification;
46
(b) ensuring there is no single point of failure; and
(c) building traceability and transparency.
Supply chains are a concern for a majority (91%) of
the US businesses surveyed. For some time now,
we have been focused on Just-in-Time (JIT) inventory
management to achieve greater efficiencies.
However, with the impact of COVID-19, there may
now need to be a focus on Just-in-Case inventory
management in addition to having suppliers and
manufacturing capacity closer to your customers.
Additionally, the Navigator report told us that
companies are choosing suppliers in countries
that have effective controls for COVID-19. A strict
supplier selection criteria, coupled with building
process, can help mitigate supply chain risk.
Companies will also need to find alternatives
optionality of supply. They cannot afford single
points of failure as they reshape their supply
chains for the future. Finding alternate sources of
supply could also make companies look inwards
within their operations to innovate and retool their
manufacturing processes. Many organisations
across various industries are taking the opportunity
opportunities for improvement to ensure the
resiliency of their business and ability of serving their
customers better.
Needless to say, COVID-19 has also been the
catalyst or accelerant in companies pushing for
more automation and digitisation in their operations
and adopting digital channels for communication
and commerce. At HSBC, we have seen a significant
increase in companies adopting our solutions for
electronic presentation of trade documents and the
use of our flagship HSBCnet platform for initiating
trade transactions. Digital platforms such as this
one, as well as other technology now available to
the businesses worldwide, have made building
traceability and transparency in the end-to-end
supply chain more accessible.
While operational resilience is certainly a key driver
for success, there is equally a need for businesses
to build financial resilience in their supply chains.
This is especially important as companies find new
sources of supply with suppliers in new markets to
diversify their sources. Companies can trade with

confidence with new suppliers using Letters of Credit
and building trust before moving to Open Account
terms of trade. Buyers can help ensure the financial
stability of their suppliers, mitigate risk, and improve
working capital by deploying supply chain finance
solutions. Companies can leverage trade loans and
receivables finance solutions to raise capital tied
to their trade flows and monetize receivables to
improve liquidity. This pandemic has shown that
companies need to be agile; constantly evaluating
their supply chain and risk strategies in order to
survive and thrive. We have seen some companies
shift back to more secured forms of international
purchases and sales, as the business environment
became more uncertain.
Throughout this turbulent year, HSBC has been able
to deliver the power of its global network to our
clients. We have provided local market expertise
and connectivity to buyers in new markets. We
also have significant and diverse experience in
facilitating global trade and mitigating risk when
trading internationally, and helped clients reshape
and repurpose their supply chains. We have been
able to partner with our clients as they transformed
their businesses to meet the changing demands of
the time. One of our clients in Canada - Fluid Energy
- repurposed their operations from producing
chemical systems to hand sanitisers. With our
help, Fluid Energy was able to secure resources
to make hand sanitiser products that were safe
for both consumers and front-line workers. The
company has now supplied over seven million
litres of hand sanitiser to help protect Canadians
against COVID-19. We provided financing to a US
corporate client who specialises in the production of
medical equipment as they successfully repurposed
their production line to win contracts to produce
ventilators. We have fast tracked approvals for our
clients, and approved 50K+ trade finance extensions
in the first half of 2020. We have worked with
governments and partners to ensure flow of goods
and documents globally. Our efforts have been
recognised by Euromoney with the award for Global
1
https://www.hsbc.com/who-we-are/hsbc-news/hsbc-sets-out-net-zero-ambition
Regional Articles
Excellence in Leadership in acknowledgement of our
“extra efforts” to support customers, communities
and employees through the coronavirus pandemic.
A key aspect of building the supply chain of the future
is ensuring that raw materials are sourced sustainably
and ethically, and that energy-efficient processes
are deployed in manufacturing. Building on our
leadership in sustainable finance that we discussed in
last year’s report in October 2020, HSBC announced
its ambitious commitment to be the leading bank
for the transition to a sustainable future. Some key
elements of our commitment include:
•  ecome a net zero bank by aligning our financed
B
emissions, which are the carbon emissions of our
portfolio of customers, to achieve net zero
by 2050 or sooner, in line with the goals of the
Paris Agreement.1
•  ecome net zero in our own operations and supply
B
chain by 2030.
•  ollaborate with stakeholders for globally consistent
C
standard for financed emissions and the carbon
offset market.
•  rovide between USD 750bn and USD 1tn of
P
financing and investment over the next 10 years.
With this bold step forward we intend to apply
a climate lens to our financing decisions across
developed and developing economies, whilst helping
our clients transition their business to a more
sustainable and resilient future.
As we imagine a time beyond the pandemic, there
is a need for us to continuously introspect, improve
and innovate how we operate. It is important to take
measures now to build supply chain resilience, so
we can insulate our businesses against future
shocks. As Charles Darwin surmised, “It is not the
strongest of the species that survives, nor the most
intelligent that survives. It is the one that is most
adaptable to change.”
47
 Regional Articles
Mauricio
Tarazona
Trade Working
Capital Finance
Head
Citi Latin
South America
America
Could Latin America benefit from
global supply chain trends?
A
lthough the COVID-19 pandemic has
been primarily a public health crisis, its
effects have impacted global trade and
supply chains at a remarkable speed
and scale. As countries around the world
locked down, supply and demand shocks resulted
in governments, businesses and consumers finding
it difficult to procure basic products and materials.
While many corporations responded quickly by
shoring up supply chains, diversifying suppliers
and adapting to changing consumer demand, the
pandemic has emphasized the need to build smarter,
more resilient and sustainable supply chains a priority
for 93% of business leaders.1 A key query for many
corporations is the role that Latin America can play in
this restructuring of supply chains.
The role of Latin America in supply chain
diversification and resilience
Companies are taking different approaches to building
supply chain resilience and sustainability, whether
multi-sourcing, near-shoring or vertical integration
(insourcing). In particular, the early experiences of the
pandemic illustrated the over-reliance of many industries
on China. For example, in March 2020, UNCTAD estimated
that the slowdown in China’s manufacturing could result
in USD 50bn in exports.2 Latin America has not been
an obvious location for sourcing and supply location for
multinational corporations in the past, except for natural
resources. Some corporations have had concerns over
variable infrastructure and logistical capabilities across
the region, and disparate, often less mature, legal and
regulatory frameworks. For example, Latin America’s
48
infrastructure spending is currently less than 3% of GDP,
in comparison to 8% in east Asia.3 There has been a lack of
progress on major infrastructure projects, with governance
issues also damaging investor confidence.
Despite the challenges, Latin America’s proximity to the US,
the number of free trade agreements in the region, and
competitive labor costs offer advantages for multinational
corporations seeking to diversify and build resilience into
their supply chains. As a result, several major corporations
are now exploring sourcing opportunities in markets such
as Chile, Colombia, Costa Rica, Brazil and Mexico.
Mexico
Mexico has eclipsed China to become the United States’
biggest trading partner, partly due to the US-China trade
war. The US-Mexico-Canada trade deal increases regional
content requirements to 75% (from 62.5% under its
predecessor NAFTA), while Mexico also benefits from its
proximity to the U.S. For example, shipping can cost 60%
less and take a fifth of the time compared with China.4
So far, Mexico has not yet been able to leverage these
opportunities, partly due to COVID-19 pressures, but also
due to limited investor-friendly government policies.
Brazil
Brazil is the only large country that has the conditions
favorable to increasing supply at scale. As a result, it
has the potential to become the world’s number one
agriculture/food exporter over the next decade, with
positive changes in regulation and public policy opening
new windows of opportunity.5
Digital growth drivers
While there remains some political, regulatory and
infrastructure challenges in Latin America, digitization

is also enabling fast-emerging opportunities. Digital
infrastructure has been limited in many parts of Latin
America in the past. For example, although 70% of
companies in OECD countries use web-accessible
solutions in their supply chain, in Latin America and the
Caribbean the figure is only 37%.6 However, one of the
outcomes of the pandemic has been a radical shift in
the way that individuals and businesses communicate,
transact and consume products and services. In April
2020, e-commerce revenue in Latin America rose by 230%
compared with the previous year, with Peru reporting a
revenue increase of 900%, and Mexico 500%.7
The same shift towards digitization of trade has been
strongly apparent as trade participants have sought
to streamline, accelerate and create transparency in
supply chains. As the pandemic struck, moving and
reconciling the flow of goods quickly, dealing with staffing
disruption and social distancing, and adapting to the
rapid adoption of remote working created challenges
across supply chains. These challenges were particularly
apparent in Latin America where manual processes are
more prevalent, and effective home working, difficult.
Consequently, while trade digitization in the region
was already a trend before the pandemic, this has
become more pronounced as the challenges and risks of
manual, paper-based processes hampered trade. Supply
chain stakeholders who have had different priorities
and pace of digital adoption are now aligning around a
common purpose.
Resolving the gap
A number of countries in Latin America already support
digital trade mechanisms, such as digital/electronic
signatures, real time or instant payments, electronic
document lodgment, electronic tax payments, etc. The
use of digital technologies from end-to-end throughout
supply chains can assist in expediting the flow of goods,
services and financing. Furthermore, digitization can
help ensure that all trade participants, including small and
medium-sized enterprises (SMEs) that have historically
been at a disadvantage in global trade, to participate on
an equivalent basis. Access to trade financing is a major
area of focus. Currently, only around 50 percent of SME
trade financing applications successfully meet acceptance
criteria, resulting in a USD 350bn trade finance gap8 in
Latin America alone.
One of the major ways of increasing access to trade
finance - and thus increasing participation in robust,
sustainable supply chains - is supply chain financing. SCF
Regional Articles
programs are already widely available in Mexico and Brazil
from banks, including Citi, and are being increasingly
adopted in countries such as Colombia and Peru, offering
a tool to target micro and SMEs that represent 99% of
businesses in Latin America9 and 67% percent of formal
employment. In contrast, only 17% of small and
medium-sized enterprises use bank credit to finance
short-term working capital.10
Digitising trade finance can be a major way of increasing
participation in SCF programs and can help to close
the trade finance gap. For example, by leveraging Citi’s
digital onboarding tools, which are available in parts of
Latin America, to join Citi Supplier Finance programs, and
the use of digital signature and tools such as Docusign
and TAOS where available, suppliers no longer need
to exchange physical documents. They can onboard
our programs quickly and easily and therefore gain
access to cost-effective short-term financing. The use of
mobile applications in some Latin American countries
also enhances the supplier experience, and therefore
encourages participation in SCF programs. In 2020, Citi
released a mobile app in several markets in Latin America
that enables suppliers to access liquidity and discount
receivables using their smartphones.
Crucially for Latin America - given the prevalence of SMEs
- digital capabilities help companies to extend the reach
of SCF programs further into supply chains. This can be
instrumental in increasing supply chain resilience and
de-risking supply chains, thus making firms in Latin
America more attractive supply chain partners. For
example, Citi is supporting one of Latin America’s largest
beverage bottler companies to connect c. 2,500 small
suppliers in Mexico into its SCF program, providing them
with access to liquidity.
Collaboration to accelerate digitization and
enhance client experience
We are also seeing collaboration and involvement from
non-traditional players across the trade and trade finance
industry, including regional and global financial technology
(fintech) partners. This is often a positive development in
driving end-to-end digitization and improving the client
experience. However, the introduction of new players
may create new risks that must be clearly understood
and addressed, such as ensuring adherence with financial
regulations around anti-money laundering and protecting
supply chain participants from cyber risk, amongst others.
In addition to organisations performing their own due
diligence on new technology partners, governments and
49
 Regional Articles

regulators in Latin America are challenged to consider
how best to reshape regulation and supervision, in order
to encourage innovation whilst containing these risks.
Extending sustainability across supply
chain ecosystems
Corporations are not only seeking to increase financial
resilience and sustainability across their supply chains,
but also social and environmental sustainability. The
more extensive and more complex that supply chains
become, the less transparency that the corporation –
and its customers – have over suppliers’ environmental,
social and governance (ESG) practices. This is becoming
an increasingly important point in Latin America as
consumers prioritise environmental and social issues in
their purchasing decisions. Sustainability is also a priority
for Citi and is pivotal to our solutions and decision-making.
In July 2020, we launched our 2025 Sustainable Progress
Strategy with the ambition to be the world’s leading bank
in driving the transition to a low-carbon economy.
Both sustainability and transparency are becoming more
important to business leaders across Latin America.
Creating environmental transparency is particularly
important to achieving ESG objectives, not only in
companies’ own operations, but also their supply chains.
Global environmental disclosure non-profit CDP has
calculated that carbon emissions from a company's supply
chain are, on average, 5.5 times greater than emissions
from its direct operations.11 As a result, a growing number
of companies are working proactively with their suppliers
to create more sustainable supply chains.
Harnessing Latin America’s supply chain
potential
COVID-19 has highlighted the vulnerabilities in corporate
supply chains but has also accelerated a major
transformation in operating models and reset corporate
and consumer priorities. While a number of challenges
remain, the reasons why corporations would consider
locating parts of their supply chains in Latin America – and
the enablers of this – are increasing. Trade and supply
chain participants are motivated to collaborate on digital
trade initiatives, but this needs to be underpinned by
government support and a supportive legal framework.
By reducing digital barriers, easing restrictions on the
goods and services on which digital networks are based,
streamlining and digitising controls and encouraging trade
innovation, Latin American governments and regulators
can help fuel digital trade and encourage corporations
globally to engage and do business with companies
across the region. Working with a financial partner with
local knowledge, experience and digital technologies
across the region to support the implementation
or expansion of an SCF program is important in
understanding the evolving regulatory and business
environment in each market, and in identifying supply
chain opportunities. It is also a valuable way of harnessing
these opportunities and shaping robust, sustainable
supply chains that can meet the expectations of the wider
stakeholder community.

1
M
 cKinsey Global Payments Report, 2020. Chapter 3: Supply Chain Finance: A Case of Convergent Evolution? www.
mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/accelerating%20winds%20
of%20change%20in%20global%20payments/chapter-3-supply-chain-finance-a-case-of-convergent-evolution.pdf
2
h
 ttps://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2297
3
T he Economist Intelligence Unit. “Will Latin America Take Advantage of Supply Chain Shifts.” www.eiu.com/n/
campaigns/will-latin-america-take-advantage-of-supply-chain-shifts/
4
Ibid
5
B
 razil 2020. Opportunity Tree. McKinsey. www.mckinsey.com/br/~/media/McKinsey/Locations/South%20America/
Brazil/Our%20Insights/Brazil%202020%20Opportunity%20Tree/McKinsey2020OpportunityTree.pdf
6
U
 nited Nations ECLAC. Universalizing access to digital technologies to address the consequences of COVID-19,
August 2020. https://repositorio.cepal.org/bitstream/handle/11362/45939/5/S2000549_en.pdf
7
w
 ww.statista.com/statistics/1116604/change-e-commerce-revenue-coronavirus-latin-america/
8
w
 ww.pymnts.com/news/international/2020/closing-latin-americas-350b-smb-trade-finance-gap/
9
h
 ttps://idbinvest.org/en/solutions/advisory-services/micro-small-and-medium-sized-enterprises#:~:text=MSMEs%20
represent%2099%20percent%20of,operation%20and%20Development%20(OECD).
10
ibid
11
w
 ww.cdp.net/en/research/global-reports/global-supply-chain-report-2019

50
Supply Chain
Finance
Directory of Suppliers

51
 Directory

ARGENTINA

HSBC
Address: Florida 201, Buenos Aires, C1005AAE, Argentina.
Website: www.hsbc.com.ar/es | Tel: +54 11 4320 2800

AUSTRALIA

Commonwealth Bank of Australia

Address: Ground Floor, Tower 1, 201 Sussex Street, Sydney, NSW, 2000, Australia.
Website: www.commbank.com.au | Tel: +61 2 9378 2000

HSBC
Address: Level 36, Tower 1, International Towers Sydney, 100 Barangaroo Avenue, Sydney NSW 2000, Australia.
Website: www.hsbc.com.au | Tel: +61 2 9006 5888

AUSTRIA

Deutsche Bank AG
Address: Fleischmarkt 1, 1010 Vienna, Austria.
Website: www.db.com/austria | Tel: +43 1 53 181 0

UniCredit Bank Austria AG

Address: Rothschildplatz 1, 1020 Vienna, Austria.
Website: www.bankaustria.at | Email: info@unicreditgroup.at | Tel: +43 (0) 50505 25

BANGLADESH

HSBC
Address: Level 4, Shanta Western Tower, 186 Bir Uttam Mir Shawkat Ali Road, Tejgaon Industrial Area, Dhaka 1208.
Bangladesh.
Website: www.hsbc.com.bd | Email: contact@hsbc.com.bd | Tel: +880 2 8814460

BOSNIA AND HERZEGOVINA

UniCredit Bank
Address: Kardinala Stepinca bb, 88000 Mostar, Bosnia and Herzegovina.
Website: www.unicreditgroup.eu | Email: info@unicreditgroup.ba | Tel: +387 33 222 999

BRAZIL

Brasilfactors SA
Address: Av. Engenheiro Luis Carlos Berrini, 1681 - 81 - Cidade Monções, São Paulo - SP, 04571-011, Brazil.
Website: www.brasilfactors.com | Email: commercial.contato@brasilfactors.com.br | Tel: +55 11 3186 8310

Citi Brazil
Address: Avda. Paulista # 1111, 17 Andar, Bela Vista Sao Paulo, SP 01311-920, Brazil.
Website: www.citigroup.com | Tel: +55 11 4009 3000

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BULGARIA

UniCredit Bank
Address: Sveta Nedelya Square 7, 1000 Sofia, Bulgaria.
Website: www.unicreditbulbank.bg | Tel: +359 (0) 700 184 84

CANADA

Bibby Financial Services (Canada) Inc

Address: 4 Robert Speck Parkway, Suite 310, Mississauga, ON L4Z 1S1, Canada.
Website: www.ecapital.com | Tel: +1 (905) 949-8300

BMO Capital Markets

Address: First Canadian Place, 21st Floor, Add: 100 King Street West, Toronto M5X 1A1, Canada.
Website: www.capitalmarkets.bmo.com | Tel: +1 844 837 9228

HSBC
Address: 885 West Georgia Street, Vancouver, British Columbia, V6C 3E9, Canada.
Website: www.hsbc.ca | Tel: +1 888 310 4722

Scotiabank
Address: 44 King Street West, Scotia Plaza 8th Floor, Toronto, Ontario, M5H 1H1 Canada.
Website: www.scotiabank.com | Tel: +1 416 866 6161

CHINA

Citibank
Address: 34F Citigroup Tower, No. 33 Huayuanshiqiao Road, Lu Jia Zui Finance & Trade Area, Shanghai 200120, China.
Website: www.citibank.com.cn | Tel: +86 21 2896 3333

Commonwealth Bank of Australia

Address: Level 11, Azia Centre, 1233 Lujiazui Ring Road, Pudong, Shanghai, China.
Website: www.commbank.com.au | Tel: +86 21 6123 8900

Deutsche Bank
Address: 28/F, Deutsche Bank Tower 1, China Central Place, No. 81 Jianguo Avenue, Chaoyang District,
Beijing 100025, China.
Website: www.china.db.com | Tel: +86 10 5969 8888

HSBC
Address: 37F, HSBC Building, Shanghai IFC, 8 Century Avenue, Pudong District, Shanghai 200120, China.
Website: www.business.hsbc.com.cn | Tel: +86 21 3888 2307

Standard Chartered Bank (China) Ltd

Address: 20/F Standard Chartered Tower, 201 Century Avenue, Lujiazui, Pudong Xinqu, Shanghai, 200120, China.
Website: www.sc.com/cn | Tel: +86 21 3851 8000

CROATIA

OTP Banka Croatia

Address: Domovinskog rata 3, 23000 Zadar, Croatia.
Website: www.otpbanka.hr | Email: info@otpbanka.hr | Tel: +385 (0) 62 201 600

UniCredit Bank (Zagrebacka banka d.d.)

Address: Trg bana Josipa Jelačića 10, 10000 Zagreb, Hrvatska, Croatia.
Website: www.zaba.hr | Email: zaba@unicreditgroup.zaba.hr | Tel: +385 1 6104 169

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CZECH REPUBLIC

Bibby Financial Services a.s

Address: Hlinky 505/118, Pisárky, Brno 603 00, Czech Republic.
Website: www.bibbyfinancialservices.cz | Tel: +420 543 124 711

UniCredit Bank Czech Republic and Slovakia a.s.

Address: Želetavská 1525/1, 140 92 Prague 4, Czech Republic.
Website: www.unicreditbank.cz | Email: info@unicreditgroup.cz | Tel: +420 225 982 511

DENMARK

Danske Bank A.S.

Address: Holmens Kanal 2-12, DK- 1092 Copenhagen K, Denmark.
Website: www.danskebank.dk | Tel: +457 0123 456

EGYPT

African Export-Import Bank

Address: Afreximbank Building, 72(B) El Maahad El Eshteraky Street – Heliopolis, Cairo 11341, Egypt.
Website: www.afreximbank.com | Tel: (202) 24564100/1/2/3

Egypt Factors S.A.E

Address: Nasr City, Public Free Zone, Block H/11, Cairo, Egypt.
Website: www.egyptfactors.com | Email: info@egyptfactors.com | Tel: +202 2672 0984

HSBC
Address: Al Maadi Company, Al Isaweyah, El Basatin, Cairo Governorate, Egypt.
Website: www.hsbc.com.eg | Tel: +202 3535 5200

FRANCE

BBVA Factoring & Confirming

Address: 47-51 Rue des Acacias, Paris 75017 France.
Website: www.bbva.fr | Email: serviceclients@bbva.com | Tel: +33 1 45 72 93 70

Bibby Factor France SA

Address: Open 6, 158, Thiers Avenue, CS 70033, 69454, Lyon Cedex 06, France.
Website: www.bibbyfactor.fr | Tel: +33 (0)4 72 13 18 57

Export Enterprises SA
Address: 240 Rue de Rivoli, F-75001, Paris, France.
Website: www.export-entreprises.com | Email: contact@export-entreprises.com | Tel: +33 142564160

Factofrance
Address: 17 bis Passerelle des Reflets, 92988 Courbevoie, France.
Website: www.factofrance.com/fr | Tel: +33 1 46 35 70 00

GE Capital- Factobail
Address: Tour Facto, 18 rue Hoche, 92988, Paris La Defense Cedex, France.
Website: www.gecapital.eu | Email: CustomerCare@ge.com | Tel: +33 1 46 35 70 00

HSBC
Address: 103 Avenue Champs Elysees, 75008 Paris, Cedex 08, France.
Website: www.hsbc.fr | Email: contact@hsbc.fr | Tel: +33 1 40 70 30 70

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Natixis
Address: 30 Avenue Pierre, Mendes , 75013 Paris, France.
Website: www.natixis.com | Email: marketing@factor.natixis.fr | Tel: +33 01583280 00

Societe Generale Factoring

Address: Le Stadium building, 3 rue Francis de Pressensé, 93577, La Plaine Saint-Denis Cedex, France.
Website: www.factoring.societegenerale.com | Tel: +33 1 71 89 99 99

GERMANY

BBVA Factoring & Confirming

Address: Neue Mainzer Strasse, 28 60311 Frankfurt am Main, Germany.
Website: www.bbva.com | Tel: +49 692222 82200

Bibby Financial Services GmbH

Address: Hansaallee 249, 40549 Dússeldorf, Germany.
Website: www.bibbyfinancialservices.de | Email: info@bibbyfinancialservices.de | Tel: +49 211 5206 53 0

Deutsche Bank AG
Address: Taunusanlage 12, 60325 Frankfurt am Main, Germany.
Website: www.db.com | Email: corporate.bank@db.com | Tel: +49 69 91000

HSBC
Address: 40002 Dússeldorf, Konigsallee 21/23, 40212 Dússeldorf, Germany.
Website: www.hsbc.de | Tel: +49 211 910615

Santander
Address: Bockenheimer Landstraße 39, 60325 Frankfurt am Main, Germany.
Website: www.santanderbank.de | Tel: +49 69 59760

SEB
Address: Stephanstraße 14 – 16, 60313 Frankfurt am Main, Germany.
Website: www.seb.de | Email: information@seb.de | Tel: +49 69 2580

UniCredit Bank AG (HypoVereinsbank)

Address: Arabellastrasse 12, 81925, Munich, Germany.
Website: www.hvb.de | Email: info@hvb.de | Tel: +49 089 378 0

GREECE

Eurobank Factors S.A.

Address: 16 Laodikeias, 1-2 Nymfaiou Streets, 115 28, Athens, Greece.
Website: www.eurobankfactors.gr | Tel: +30 21 4406 0700

Piraeus Bank
Address: 4 Amerikis St, 105 64 Athens, Greece.
Website: www.piraeusbank.gr | Tel: +30 210 3288000

National Bank of Greece SA

Address: Eolou 86, 105 59 Athens, Greece.
Website: www.nbg.gr | Email: contact.center@nbg.gr | Tel: +30 210 4848484

HONG KONG

Bibby Financial Services (Asia) Ltd.

Address: Unit 2302, 23/F., Jubilee Centre, 18 Fenwick Street, Wanchai, Hong Kong.
Website: www.bibbyfinancialservices.hk | Email: marketinghk@bibbyfinancialservices.com | Tel: +852 3759 0333

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Commonwealth Bank of Australia

Address: One Exchange Square, 8 Connaught Pl, Central, Hong Kong.
Website: www.commbank.com.au | Tel: +852 2844 7500

HSBC
Address: Level 6, HSBC Main Building, 1 Queen’s Road Central, Hong Kong.
Website: www.hsbc.com.hk | Tel: +852 2748 8288

NatWest Markets
Address: NatWest Markets, Unit 702, LHT Tower, 31 Queen’s Road, Central, Hong Kong.
Website: www.natwestmarkets.com | Tel: +852 2327 5345

Simmons & Simmons

Address: 30th Floor, One Taikoo Place, 979 King’s Road, Hong Kong.
Website: www.simmons-simmons.com | Tel: +852 2868 1131

Standard Chartered Bank

Address: 10/F, Standard Chartered Bank Building, 4-4A Des Voeux Road, Central, Hong Kong.
Website: www.sc.com/hk | Tel: +852 2537 3124

Wells Fargo Capital Finance

Address: 27/F. Three Pacific Place, 1 Queens Road East, Hong Kong.
Website: www.wellsfargo.com | Email: internationalconnections@wellsfargo.com | Tel: +852 3650 8000

HUNGARY

UniCredit Hungary Zrt.

Address: 1054 Budapest, Szabadság tér 5-6, Hungary.
Website: www.unicreditgroup.eu | Tel: +36 1 301 5200

INDIA

Bibby Financial Services (India) Private Ltd

Address: 121, 1st Floor, Sector 44, Gurgaon 122003, India.
Website: www.bibbyfinancialservices.in | Tel: +91 124 4675300

Commonwealth Bank of Australia

Address: Level 2, Hoechst House, NCPA Marg Nariman Point, Mumbai, Maharashtra 400021, India.
Website: www.commbank.com.au | Email: enquiries@commbank.co.in | Tel: +91 2261390100

HSBC
Address: 52/60 Mahatma Gandhi Road, Kala Ghoda, Fort, Mumbai 400 001, Mumbai, Maharashtra 400001, India.
Website: www.hsbc.co.in | Email: info@hsbc.co.in | Tel: +91 1860 266 2667
Koinearth
Address: L77, 15th Cross RoadSector 6, HSR Layout, Bengaluru 560012, India.
Website: koinearth.com | Email: info@koinearth.com | Tel: +91 998 607 3402

Standard Chartered Bank

Address: 7/F, Crescenzo C-38/39 G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400051, India.
Website: www.sc.com/in | Email: Customer.care@sc.com | Tel: +91 22 6115 8653

INDONESIA

Commonwealth Bank of Australia

Address: Lt Dasar & Lt 2 Wisma Metropolitan 2, Ji Jend. Sudirman Kav 29-31, Jakarta 12920, Indonesia.
Website: www.commbank.co.id | Email: enquiries@commbank.co.id | Tel: +62 21 5289 7109

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HSBC
Address: World Trade Centre1, Level 1, Jl. Jendral Sudirnam Kav. 29-31, Jakarta 12920, Indonesia.
Website: www.hsbc.co.id | Tel: +6221 2551 4722

IRELAND

Bibby Financial Services (Ireland) Ltd

Address: 4th Floor, Heather House, Heather Road, Sandyford, Dublin18, Ireland.
Website: www.bibbyfinancialservices.ie | Tel: +353 1 297 4911

ITALY

BBVA Factoring & Confirming

Address: Via Cino del Duca, 8, 20122 Milan, Italy.
Website: www.bbva.es | Tel: +39 0276 2961

UniCredit S.p.A
Address: Piazza Gae Aulenti 3 – Tower A, 20154 Milan, Italy.
Website: www.unicredit.it | Email: info.ucfactoring.it@unicreditegroup.eu | Tel: +39 02 3340 8973

KAZAKHSTAN

ATF Bank JSC

Address: Panfilov Street 98 A, Almaty 05000, Kazakhstan.
Website: www.atfbank.kz | Email: contactcentre@atfbank.kz | Tel: +7 727 258 3000

KOREA

Standard Chartered First Bank Korea Ltd

Address: 47, Jong-ro, Jongno-gu, Seoul, Korea.
Website: www.standardchartered.co.kr | Tel: +82 2 3702 5693

LUXEMBOURG

Tawreeq Holdings
Address: #14 Rue de Strassen, L-2555 Luxembourg, Grand Duchy of Luxembourg.
Website: www. tawreeqholdings.com | Tel: +352 262 650

MALAYSIA

HSBC
Address: North Tower, 2, Leboh Ampang, City Centre, 50100 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, Malaysia.
Website: www.hsbc.com.my | Tel: +603 2075 3000

Standard Chartered Bank Malaysia

Address: Level 26, Equatorial Plaza, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.
Website: www.sc.com/my | Email: Malaysia.feedback@sc.com | Tel: +603 2117 7777

MALTA

FIMBank Plc
Address: Mercury Tower, The Exchange Financial & Business Centre, Elia Zammit Street, St Julian’s STJ 3155, Malta.
Website: www.fimbank.com | Email: info@fimbank.com | Tel: +356 2132 2100

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MEXICO

HSBC
Address: Paseo de la Reforma 347, 2nd floor Col Cuauhtémoc, CP 06500, México DF.
Website: www.hsbc.com.mx | Email: Mexico_une@hsbc.com.mx | Tel: +52 5557 212222

NETHERLANDS

FCI
Address: 1017 DR Amsterdam, Keizersgracht 559, The Netherlands.
Website: www.fci.nl | Email: fci@fci.nl | Tel: +31 20 627 0306
GarantiBank International NV
Address: Keizersgracht 569-575, 1017 DR Amsterdam, The Netherlands.
Website: www.garantibank.eu | Email: info@garantibank.eu | Tel: +31 20 553 9700

ING Commercial Banking

Address: Bijlmerdreef 106, 1102 CT Amsterdam, The Netherlands.
Website: www.ingwb.com | Tel: + 312 0563 9111

NEW ZEALAND

ASB Bank Limited

Address: ASB North Wharf, 12 Jellicoe, Auckland 1010, New Zealand.
Website: www.asb.co.nz | Tel: +64 9 306 3000

SAUDI ARABIA

International Islamic Trade Finance Corporation (ITFC)

Address: 14th Floor- Islamic Development Bank Group, King Khalid Road, Jeddah 21534, PO Box 55335, Saudi Arabia.
Website: www.itfc-idb.org/en | Email: ITFC@itfc-idb.org | Tel: +966 12 646 8337

SERBIA

SGS
Address: Jurija Gagarina 7b, Belgrade, 11070, Serbia.
Website: https://www.sgs.rs/en | Tel: +381 11 71 55 275

UniCredit Bank
Address: Rajiceva 27-29, Belgrade11000, Serbia.
Website: www.unicreditbank.rs | Email: office@unicreditbank.rs | Tel: +381 11 3204 500

SINGAPORE

Bibby Financial Services (Singapore) Pte Ltd

Address: 6 Shenton Way #18-08A, OUE, Downtown 2, Singapore 068809, Singapore.
Website: www.bibbyfinancialservices.sg | Email: singapore@bibbyfinancialservices.com | Tel: +65 6922 5030

Commonwealth Bank of Australia

Address: 38 Beach Road, South Beach Tower, #07-11, Singapore 189767, Singapore.
Website: www.commbank.com.au | Tel: +65 6349 7000

Deutsche Bank AG
Address: One Raffles Quay, South Tower Level 17, Singapore 048583, Singapore.
Website: www.db.com/singapore | Tel: +65 6423 8001

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HSBC
Address: 21 Collyer Quay #07-01, HSBC Building, Singapore 049320, Singapore.
Website: www.hsbc.com.sg | Email: direct@hsbc.com.sg | Tel: +65 6224 8080

Mizuho Bank, Ltd.

Address: 12 Marina View, #08–01 Asia Square Tower 2, Singapore 018961, Singapore.
Website: www.mizuhobank.com/singapore | Tel: +65 6805 2000

NatWest Markets
Address: One Raffles Quay, Level 23, South Tower, Singapore, 048583, Singapore.
Website: www.natwestmarkets.com | Tel: +65 6518 8888

Standard Chartered Bank

Address: Marina Bay Financial, Centre (Tower 1), Level 22, 8 Marina Boulevard 018981, Singapore.
Website: www.sc.com/sg | Tel: + 65 6596 8240

SLOVAKIA

Bibby Factoring Slovakia, a.s.

Address: Prievoska 4D, Block E, 821 09 Bratislava, Slovakia.
Website: www.bibbyfinancialservices.sk | Email: slovakia@bibbyfinancialservices.com | Tel: + 421 02/32 780 056

UniCredit Bank Czech Republic and Slovakia a.s

Address: Šancová 1/A, 813 33 Bratislava, Slovakia.
Website: www.unicreditbank.sk | Email: info@unicreditgroup.sk | Tel: +421 44 547 6870

SLOVENIA

UniCredit Banka Slovenija d.d.

Address: Smartinska cesta 140, 1000 Ljubljana, Slovenia.
Website: www.unicreditbank.si | Email: info@unicreditgroup.si | Tel: +386 1 5876 600

SOUTH AFRICA

Absa Bank Ltd.

Address: 7th Floor, Absa Towers West, 15 Troye Street, Johannesburg 2001, South Africa.
Website: www.absa.africa | Email: absa@absa.co.za | Tel: +27(0) 11 350 4000

Standard Chartered Bank

Address: 2nd Floor, 115 West Street, Sandton 2196, Gauteng Province, South Africa.
Website: www.sc.com/za | Email: Info.SouthAfrica@sc.com | Tel: +27(0) 11 217 6600

SPAIN

Banco Santander SA
Address: Avda de Cantabria s/n, 28660 Boadilla del Monte, Madrid, Spain.
Website: www.santander.com | Email: atenclie@gruposantander.com | Tel: +34 91 2890 460

BBVA Factoring
Address: Recoletos, 10 - Ala Sur - Pl. Baja 28001, Madrid, Spain.
Website: www.bbva.es | Tel: +34 91 374 85 15

Caixabank SA
Address: Avda Diagonal, 621 – 629, 08028 Barcelona, Spain.
Telephone: 902 1105 82 / +34 935 82 98 03 | Email: accionista@caixabank.com

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SWEDEN

SEB
Address: Kungsträdgårdsg 8, Stockholm, SE- 106 40, Sweden.
Website: www.sebgroup.com | Tel: +46 77 162 5353

TAIWAN

DBS Bank (Taiwan) Ltd.

Address: 16rd Floor, No. 36, SongRen Rd., XinYi Dist., 110, Taipei, Taiwan.
Website: www.dbs.com.tw | Tel: +886 2 6612 8806 / +886 2 6612 9422

Deutsche Bank AG
Address: Taipei Branch, 13/F & 10/F, 296 Jen Ai Road, Sec. 4, Cathay Life Insurance Building, Taipei, 106 Taiwan.
Website: www.db.com/taiwan | Tel: +886 2 2192 4666

Standard Chartered Bank (Taiwan) Ltd

Address: Room 9C #168, Tun Hwa North Road, 10548, Taipei, Taiwan.
Website: www.sc.com/tw/en | Tel: +886 2 6602 9302

TURKEY

Garanti Factoring
Address: Çamçeşme Mahallesi Tersane Caddesi No:15 Kat:3 B Blok 34899 Pendik, Istanbul, Turkey.
Website: www.garantifactoring.com | Email: bilgi@garantifactoring.com | Tel: +90 212 365 5212

HSBC A.S.
Address: Esentepe Mah. Büyükdere Cad. No:128 Floor 11, 34394 Şişli, Istanbul, Turkey.
Website: www.hsbc.com.tr | Tel: +90 212 376 4000

Yapi Kredi Bankasi A.S.

Address: Yapi Kredi Plaza, D block, Levent, 34330, Besiktas/Istanbul, Turkey.
Website: www.yapikredi.com.tr | Tel: +90 212 339 6366

UNITED ARAB EMIRATES

Habib Bank AG Zurich

Address: Sheikh Zayed Road, 4th Interchange, Umm Al Sheif, Dubai, UAE.
Website: www.habibbank.com/uael | Tel: +971 4387 0700

HSBC
Address: HSBC Tower, Ground floor, Emaar square, Downtown, Dubai, UAE.
Website: www.hsbc.ae | Tel: +971 600 554722

Tawreeq Holdings
Address: 1303, 13th floor, South Wing, Emirates Financial Towers, DIFC, Dubai, UAE.
Website: www. tawreeqholdings.com | Tel: +971 4 3863 700

UNITED KINGDOM

Bank of America
Address: Financial Centre, 2 King Edward Street, London EC1A 1HQ, UK.
Website: www.bofaml.com | Tel: +44(0) 20 7628 1000

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Barclays Bank plc

Address: 2 Churchill Place, Canary Wharf, London E14 5RB, UK.
Website: www.barclays.co.uk | Tel: +44 845 755 5555

BBVA SCF and Receivables Finance

Address: 1 Canada Square, 44th Floor, Canary Wharf, London E14 5AB, UK.
Website: www.bbvauk.com | Email: businessuk.group@bbva.com | Tel: +44 207 623 3060

Bibby Financial Services

Address: First Floor, Pembroke House, Banbury Business Park, Anyho Road, Adderbury, Oxfordshire OX17 3NS, UK.
Website: www.bibbyfinancialservices.com | Tel: +44 808 252 7460

BNY Mellon
Address:160 Queen Victoria Street, London EC4V 4LA, UK.
Website: www.bnymellon.com | Tel: +44 20 3322 4806

Carr-Lyons Search & Selection

Address: 34 Lime Street, London EC3M 7AT, UK.
Website: www.carrlyons.com | Email: info@carrlyons.com | Tel: +44 20 7588 3322

Citibank
Address: Citigroup Centre, 33 Canada Square, Canary Wharf, London E14 5LB, UK.
Website: www.citigroup.com | Tel: +44 20 7500 1992

Commonwealth Bank of Australia

Address: 60 Ludgate Hill, London, EC4M 7AW, UK.
Website: www.commbank.com.au | Tel: +44 20 7710 3999

Crossflow Payments
Address: 5 Cheapside, London EC2V 6AA, UK.
Website: www.crossflowpayments.co.uk | Email: sales@crossflowpayments.co.uk | Tel: +44 20 3475 9080

Deutsche Bank
Address: 1 Great Winchester Street, London EC2N 2DB, UK.
Website: www.db.com/unitedkingdom | Tel: +44 20 754 58000

Drum Risk Management Ltd.

Address: 39 Eastcheap, London EC3M 1DT, UK.
Website: www.drumrisk.com | Email: info@DRUMrisk.com | Tel: +44 20 7929 2473

HSBC Bank Plc

Address: HSBC Holdings plc, 8 Canada Square, Canary Wharf, London E14 5HQ, UK.
Website: www.hsbc.co.uk | Tel: +44 20 7991 8888

Lloyds Bank Corporate Markets

Address: 25 Gresham Street, London EC2V 7HN, UK.
Website: www.lloydsbankinggroup.com | Tel: +44 20 7626 1500

UKRAINE

PJSC “Ukrsotsbank”
Address: 29, Kovpaka Street, Kyiv, 03150, Ukraine.
Website: https://en.ukrsotsbank.com | Email: info@ukrsotsbank.com | Tel: +38 (044) 205 45 55

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USA

BBVA SCF and Receivables Finance

Address: 1345 Avenue of the Americas, 44th Floor, 10105, New York, NY, USA.
Website: www.bbvausa.com | Tel: +1 212 728 1500

Deutsche Bank AG
Address: 60 Wall Street, 10005, New York, NY, USA.
Website: www.db.com/usa | Tel: +1 212 250 2500

eCapital
Address: 600 Townpark Lane, Suite 450, Kennesaw, GA 30144, USA.
Website: www.ecapital.com | Tel: +1 887 822 4229

HSBC Bank USA N.A

Address: 452, 5th Avenue, 10018, New York, NY, USA.
Website: www.us.hsbc.com | Tel: +1 212 525 4955

JPMorgan Chase
Address: 270 Park Avenue, 10017-2070, New York, NY USA.
Website: www.jpmorganchase.com | Email: institute@jpmchase.com | Tel: +1 212 270 6000

Monterey Bay International Trade Association (MBITA)

Address: 200 Washington St, Suite 207, 95060, Santa Cruz, CA, USA.
Website: www.globalmbita.com | Email: tlivoti@mbita.org | Tel: +1 831 335 4780

Wells Fargo Capital Finance - Broadway Place

Address: 120 Broadway Ste 102, 90401, Santa Monica, CA, USA.
Website: www.wellsfargo.com | Tel: +1 424 252 6206

VIETNAM

Standard Chartered Bank (Vietnam)

Address: 37 Ton Duc Thang Street, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam.
Website: www.sc.com/vn/ | Tel: +842 8 7300 0730

Vietnam International Bank

Address: Level 1, 6, 7, Corner Stone Building, No. 16, Phan Chu Trinh Street, Hoan Kiem District, Hanoi, Vietnam.
Website: www.vib.com.vn | Tel: +848 4 6276006

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Directory of Suppliers

63
 Directory

Global and Europe Contact Latin America Contact

Tel: (+34) 91 786 83 94 Tel: (+52) 55 85 25 03 07
sales@alvantia.com sales.la@alvantia.com
Av. Albufera 321, Madrid, Spain Andrés Bello 10, Mexico DF, Mexico
www.alvantia.com www.alvantia.com

What are we?

At Alvantia, we are recognised experts in solutions for Corporate Banking. Our highly-qualified
multidisciplinary team includes business logic technicians and specialists in the latest technology with a deep
knowledge of system integration.

What do we do?
We are trusted partners in defining, building and delivering commercial financing solutions. We provide
customized development and easily integrated software.

Why us?
Our experience and expertise enable us to provide forward-looking solutions which deliver results and exceed
expectations, due to:

1. Our past experience. Over one million hours successfully designing, building and integrating commercial
financing solutions for the largest and most prestigious financial entities, becoming proved business
prescribers.

2. Our present activity. Definition and development of products with optimum operational and
management processes based on market understanding, a global vision and a deep functional
knowledge.

3. Our future vision. Alvantia is already ahead of the curve and bringing the future forward. Using cutting
edge technology, Alvantia develops products that work in tomorrow’s world today.

What differentiates our software solutions?

Cutting edge, customisable and user-friendly solutions which fully integrate with our clients’ systems.

Our Commercial Financing Software Solutions are highly innovative and based on the latest state of the art
technology. They incorporate the most advanced commercial modalities in Factoring and other Supply Chain
Finance services at both local and international levels.

Our software solutions have been created and designed in order to satisfy the user’s needs, this is why they
are highly customizable and guarantee a real-time and automated treatment of huge volumes of information.
In addition, choosing our solutions guarantees both, reducing deployment times and achieving a complete
integration with your entity’s structural systems.

We guarantee quality in our solutions by combining the paradigm of continuous integration with an advanced
methodology and strict compliance with our quality standards, conforming to the international standards ISO
9001, 14001 and 27001.

64
 Directory

EMEA The Americas

22 Worple Road, 735 Tank Farm Road, Suite 185
London SW19 4DD San Luis Obispo,
United Kingdom CA 93401-7074
United States
Daryll.Lewis@hpdlendscape.com
Tel: +44 (0)20 8780 6800 Dave.Oksner@hpdlendscape.com
Tel: +1 (805) 544 5821
Australia
Level 36 Governor Phillip Tower Singapore
1 Farrer Place Level 11, Marina Bay Financial Centre
Sydney, NSW 2000 Tower 1,
Australia 8 Marina Blvd, 018981
Singapore
Dave.Smart@hpdlendscape.com
Tel: +61 2 8823 3490 khengleong.lee@hpdlendscape.com
Tel: +65 6653 4688

Cash flow is the lifeblood of a business and we work hard to support and improve access to global SME
finance through technology partnerships collaboration and innovation. Award winning HPD Lendscape
is the world’s leading technology platform for secured finance, currently deployed by over 100 lenders
across the UK, EMEA, North America, APAC, and Sub-Saharan Africa. The Lendscape team forms a blend of
finance professionals, technology experts and software developers. Our vision is to continue to build new
capabilities that offer an environment for supporting all secured business finance. The Lendscape platform
streamlines banks’ and lenders’ systems and reduces risk, whilst cutting down on administration and
speeds up “invoice to funding” time. Our customer portfolio spans over 50 markets and includes some of
the worlds’ greatest brands in banking and financial services.

HPD Lendscape: Keeps you in control

Efficient and flexible, the Lendscape platform provides full control of your working capital finance solutions. It
helps to manage compliance and minimise risk through automated data extraction and analysis of real-time
business data, enabling confident decisions for you and your clients.

Learn more about us: www.hpdlendscape.com

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 Directory

Demica
Bow Bells House 020 7450 2500 Maurice Benisty
1 Bread Street www.demica.com maurice.benisty@demica.com
London
EC4M 9BE

Demica enables companies to unlock their potential by monetising working capital trapped in their supply
chains. Using state-of-the-art platform technology and decades of financial expertise, Demica enables the
delivery and automation of a broad range of receivables and payables finance with over 45 platform bank
and non-bank funders to enable the delivery of essential liquidity.

Based in London and New York, Demica facilitates funding of over USD 16bn worth of programmes in
135 countries and maintains partnerships with over 150 banks and institutional investors.

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 Directory

3i Infotech Inc.
Address: 450 Raritan Center Parkway, Suite B, Edison, NJ 08837-3944, USA.
Website: www.3i-infotech.com | Email: marketing@@3i-infotech.com | Tel: +1 732 710 4444

3i Infotech (UK) Ltd

Address: Office 405 One Thomas More Square, London E1W 1YN, UK.
Website: www.3i-infotech.com | Email: marketing@3i-infotech.com | Tel: +44 7501 462 973

Afb Application Services AG

Address: Landsberger Straße, 300 80687. Műnchen, Germany.
Website: www.afb.de | Email: info@afb.de | Tel: +49 89 78 000 0

Alida
Address: 365 Bloor St. E, 5th Floor, Toronto, ON, M4W 3L4, Canada.
Website: www.alida.com | Tel: +1 604 647 1980

Alvantia
Address: Avenida de la Albufera, 321, Floor 3, Office 8, 28031, Madrid, Spain.
Website: www.alvantia.com | Email: sales@alvantia.com | Tel: +34 91 786 83 94

Alvantia (Mexico)
Address: Andrés Bello 10, Mexico DF, Mexico.
Website: www.alvantia.com | Email: sales.la@alvantia.com | Tel: +52 5585 250 307

Aptic AB
Address: Klarabergsviadukten 63, 111 64 Stockholm, Sweden.
Box 190, 101 23 Stockholm, Sweden
Website: www.aptic.net | Email: hello@aptic.net | Tel: +46 10 101 2000

Arcares (Lutech Group)

Address: Via Milano, 150, 20093 Cologno Monzese, Italy.
Website: www.arcares.lutech.group | Email: info@lutech.it | Tel: +39 0225427011

Bolero International Ltd

Address: Hersham Place Technology Park, Molesey Road, Walton-on-Thames, KT12 4RZ, UK.
Website: www.bolero.net | Email: info@bolero.net | Tel: +44 20 7759 7000

China Systems
Address: 5th Floor, Building No.3, 699-8 Xuan Wu Avenue, Xuan Wu District, Nanjing City, Jiangsu,
210042, China.
Website: www.chinasystems.com | Email: cs@chinasystems.com | Tel: +86 25 8558 2112

CGI
Address: 7 Hanover Square, 33 Whitehall St, 15th Floor, New York, NY 10004, USA.
Website: www.cgi.com | Email: banking.solutions@cgi.com | Tel: +1 212 612 3600

CGI (Canada)
Address: 1350 René-Lévesque, Boulevard West, 15th Floor, Montréal, Quebec, H3G 1T4, Canada
Website: www.cgi.com | Email: banking.solutions@cgi.com | Tel: +1 514 841 3200

Coastline Solutions
Address: Clara House, Glenageary Park, Glenageary, Co. Dublin, Ireland.
Website: www.coastlinesolutions.com | Email: info@coastlinesolutions.com | Tel: +353 1 235 2166

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 Directory

Codix
Address: Immeuble Le Carat, 200 Rue du Vallon, Sophia-Antipolis, 06560 Valbonne, France.
Website: www.codix.eu | Email: info@codix.eu | Tel: +33 4 89 87 77 77

Codix (USA)
Address: 1230 Peachtree Street NE Suite 1900 – PMB 208 Atlanta, Ga 30309 USA.
Website: www.codix.eu | Email: info@codix.eu | Tel: +1 404 790 0998

Complex Systems Inc.

Address: 3553 31 St NW #111, Calgary, Alberta, T2L 2K7, Canada.
Website: www.complexsysteminc.com | Email: CS@complexSysteminc.com | Tel: +1 403 452 4312

Crossflow Payments Ltd

Address: Octagon Point St Pauls, 5 Cheapside, London EC2V 6AA, UK.
Website: www.crossflowpayments.co.uk | Email: sales@crossflowpayments.co.uk | Tel: +44 203 475 9080

Dancerace plc
Address: Ground Floor, Riverside South Building, Walcot Yard, Bath, BA1 5BG, UK.
Website: www.dancerace.com | Email: info@dancerace.com | Tel: +44 1225 536 770

Demica
Address: Bow Bells House, 1 Bread Street, London EC4M 9BE, UK.
Website: www.demica.com | Email: advisory@@demica.com | Tel: +44 207 450 2500

Efcom GmbH
Address: Martin-Behaim-Strasse 20, 63263, Neu-Isenburg, Germany.
Website: www.efcom.de | Email: ef3sales@efcom.de | Tel: +49 6102 883500

EQ Riskfactor
Address: Sutherland House, Russell Way, Crawley, West Sussex, RH10 1UH UK.
Website: www.equiniti.com | Email: RiskfactorEnquiries@equiniti.com | Tel: +44 1903 698 600

Finastra
Address: 4 Kingdom Street, Paddington, London W2 6BD, UK.
Website: www.finastra.com | Tel: +44 (0) 203 320 5000

Genpact (India)
Address:Delhi IT Park, DMRC Building, Shastri Park, New Delhi 110053, India.
Website: www.genpact.com | Email: helpdesk.peoplefirst@genpact.com | Tel: +91 11 4932 5000

Genpact (UK)
Address: 5th Floor, 5 Merchant Square, Paddington, London W2 1AY, UK.
Website: www.genpact.com | Email: helpdesk.peoplefirst@genpact.com | Tel: +44 207 227 5200

Greensill
Address: One Southampton Street, Covent Garden, London WC2R 0LR, UK.
Website: www.greensill.com | Email: info@greensill.com | Tel: +44 20 3436 2000

HPD Lendscape
Address: 22 Worple Rd, Wimbledon, London SW19 4DD, UK.
Website: www.hpdlendscape.com | Email: contact@hpdlendscape.com | Tel: +44 208 780 6800

HPD Lendscape (Americas)

Address: 735 Tank Farm Road, Suite 185, San Luis Obispo, CA 934017074, USA.
Website: www.hpdlendscape.com | Email: contact@hpdlendscape.com | Tel: +1 805 544 5821

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 Directory

HPD Lendscape (Australia)

Address: Level 36, Governor Phillip Tower, 1 Farrer Place, Sydney, NSW 2000, Australia.
Website: www.hpdlendscape.com | Email: contact@hpdlendscape.com | Tel: +61 28 823 3490

HPD Lendscape (Singapore)

Address: Level 11, Marina Bay Financial Centre, Tower 1, 8 Marina Blvd, 018981, Singapore.
Website: www.hpdlendscape.com | Email: contact@hpdlendscape.com | Tel: +65 6653 4688

Infor Nexus
Address: 641 Sixth Avenue, 4th Floor, NY 10011, New York, USA.
Website: www.infor.com | Email: service@infor.com | Tel: +1 646 336 1700

IFG
Address: 7910 Woodmont Avenue, Suite 1050, Bethesda, MD 20814, USA.
Website: www.interfacefinancial.com | Email: dscf@interfacefinancial.com | Tel: +1 877 210 9748

IFG (UK)
Address: 1 Gresham Street, London, EC1A 4ER, UK.
Website: www.interfacefinancial.co.uk | Email: uk@interfacefinancial.com | Tel: +0800 014 8626

IMS Enterprise Solutions S.A.

Address: 7 Nik. Vrettakou Street, 17455 Alimos, Greece.
Website: www.imsgr.com | Email: info@imsgr.com | Tel: +0030 210 980 1110

Integrated Business Solutions S.A.L

Address: Choucri Assli street, Boustany Building, 5th Floor, Achrafieh, Furn Al Hayek, Beirut, Lebanon.
Website: www.ibs.com.lb | Email: info@ibs.com.lb | Tel: +961 1 216 840

Kompli-Global (UK)
Address: 1 Charterhouse Mews, Barbican, London, EC1M 6BB, UK.
Website: www.kompli-global.com | Email: hello@kompli-global.com | Tel: +44 20 3199 7115

Kompli-Global (USA)
Address: Wall Street, Lower Manhatten, New York City, USA.
Website: www.kompli-global.com | Email: hello@kompli-global.com | Tel: +1 212 252 2062

Kyriba
Address: 4435 Eastgate Mall, Suite 200, San Diego, CA92121-1980, USA.
Website: www.kyriba.com | Email: info-usa@kyriba.com | Tel: +1 858 210 3560

Neurosoft S.A.
Address: 466 Irakliou Avenue & Kiprou, 141 22 Iraklio Attikis, Athens, Greece.
Website: www.neurosoft.gr | Email: info@neurosoft.gr | Tel: +30 210 685 5061

Novabase
Address: Av. D. Joao II, 34, Parque das Nacoes, 1998-031 Lisboa, Portugal.
Website: www.novabase.pt | Email: info@novabase.pt | Tel: +351 213 836 300

OSMO Data Technology

Address: Gostrey House, Union Road, Farnham, Surrey, GU9 7PT, UK.
Website: www.osmodatatechnology.com | Tel: +44 (0) 125 272 8184

Premium Technology
Address: 32 Broadway, Suite 501, New York, NY 10004, USA.
Website: www.premiumit.com | Email: info@premiumit.com | Tel: +1 212 855 5511

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 Directory

PrimeRevenue
Address: 600 Peachtree St NE, Suite 4400, Atlanta, GA 30308, USA.
Website: www.primerevenue.com | Email: support@primerevenue.com | Tel: +1 678 904 7100

ProfitStars
Address: 1025 Central Expressway South, Allen, TX 75013-2790, USA.
Website: www.profitstars.com | Tel: +1 972 359 5500

SCHUMANN
Address: Weender Landstrasse 23, 37073 Göttingen, Germany.
Website: wwww.prof-schumann.com | Email: info@prof-schumann.de | Tel: +49 551 383 15 0

SmartStream Technologies
Address: St Helen’s, 1 Undershaft, London, EC3A 8EE, UK.
Website: www.smartstream-stp.com | Email: info@smartstream-stp.com | Tel: +44 (0)20 7898 0600

Surecomp Business Solutions

Address: 1 Yorkdale Road, Suite 602, Toronto, ON M6A3A1, Canada.
Website: www.surecomp.com | Email: marketing@surecomp.com | Tel: +1 416 781 5545

Surecomp Business Solutions (UK)

Address: View Point, Basing View, Basingstoke, RG221 4RG, UK.
Website: www.surecomp.com | Email: Marketing@surecomp.com | Tel: +44 125 636 5400

Swift
Address: Avenue Adèle 1, B-1310 La Hulpe, Belgium.
Website: www.swift.com/corporates | Tel: +32 2 655 3111

Taulia
Address: 250 Montgomery Street, 4th Floor, San Francisco, CA 94104, USA.
Website: www.taulia.com | Email: info@taulia.com | Tel: +1 415 376-8280

Tinubu Square
Address: 169 Quai de Stalingrad, 92130 Issy-les Moulineaux, France.
Website: www.tinubu.com | Email: contact@tinubu.com | Tel: +33 1 5595 8585

Tradeshift Inc.
Address: 221 Main Street, Suite 250, San Francisco, CA 94105, USA.
Website: www.tradeshift.com | Tel: +1 800 381 3585 +1 650 303 0649

Validis
Address: 207 Waterloo Road, London SE1 8XD, UK.
Website: www.validis.com | Email: datashare-support@validis.com | Tel: +44 (0) 844 375 9070

William Stucky & Associates

Address: One Embarcadero Center, Suite 1330, San Francisco, CA 94111, USA.
Website: www.stuckynet.com | Tel: +1 415 788 2441

Zenfact Solutions PVT Ltd.

Address: Millenium Business Park, Unit No. 317, Building 2, Sector 1, Mahape, Navi Mumbai.- 400-701,
India.
Website: www.zenfact.com | Email: sales@zenfact.com | Tel: +91 022 656 424 00

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