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Supply chain finance: upgrade

3 MIN READ
Apr 3, 2023

The PrimaTrade platform delivers an important set of supply chain finance upgrades.

Our platform connects buyers with suppliers and funders in order to enable:

and

What is the supply chain finance upgrade?

The PrimaTrade platform combines the functionality and approach of traditional supply chain finance with classic trade finance technology (ie: documentary credits):

Trade finance and supply chain finance combine

Trade finance and supply chain finance combined

It all starts with data and documents - and how they are processed:

By getting much better information much earlier, PrimaTrade's platform can:

This leads to a considerable number of benefits for buyers, suppliers and funders.

What are the benefits?

Buyers:

Suppliers:

Funders:

Our blog about AP Automation at shipment is here.

Our blog about Banks and Platforms is here.

How limited are existing SCF programs?

Mckinsey recently analysed the coverage of supply chain finance programs and concluded that:

"Significant value in the global supply-chain finance (SCF) market remains untapped. Nearly 80 percent of eligible assets do not benefit from better working-capital financing, and the remaining one-fifth of assets are often inefficiently financed. Despite improvements made in recent years, advances have been largely incremental."

Their summary of the coverage gap is as follows:

Coverage gap in supply chain finance

Source: McKinsey supply chain finance report 2021 exhibit B

Our comment on the above is (a) the interesting column is the one on the right - showing that the existing penetration of SCF is $0.5 trillion on $17 trillion of potential and (b) the unaddressed gap is more likely much bigger than the $3 trillion shown - but the numbers are huge, come what may. The report is available here.

The gap arises for a variety of reasons:

Addressing the gap

Addressing this gap has required a different approach to the way that invoices are approved. Buyers find invoice approval before delivery difficult to achieve - yet this is what is really required to provide tangible benefits to suppliers.

The PrimaTrade platform provides the next generation of supply chain finance solutions - enabling existing programs to be extended easily to the long-tail of suppliers that really need support (SMEs in emerging markets, in particular).

Many banks also want to offer supply chain finance progams themselves but do not have an in-house platform, nor do they wish to on-board a fintech. For these banks, PrimaTrade offers a ready-made way forward which avoids on-boarding and which delivers a market-leading product offering.

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