Trade finance moves toward digitization
R3, the blockchain-focused consortium of banks and tech developers, has developed an app on its DLT Corda platform focused on trade finance. The app will work in the same way as standard letters of credit, in recognition of how effective these are at mitigating risks. It was developed with a specific test group of 12 mainly Asian and European banks, including Bangkok Bank, HSBC, Intesa Sanpaolo, and Mizuho.
The banks are now looking to pilot the app with clients, and hope to make it widely available from 2018. The app development group includes tech platform CGI, which was able to bring in its own trade finance domain knowledge and work with the banks to capture the best generic industry practice for implementation within the app, and design the user interface
Fintech Firms Nimbly Moving Into Rather Massive Global Trade Financing Market
The ongoing digital transformation of business-to-business (B2B) payments has been well chronicled by Mercator Advisory Group. Part of that transformation can be found in the advancement of alternative cash cycle finance capabilities, led by nonbank financial technology (fintech) vendors during the past 10 year.
There is much debate about the actual opportunity for supply chain finance, probably as much as is there is confusion around the definitions. In the view of Mercator Advisory Group, the market is globally robust with a more than trillion dollars of estimated available open account financing still ripe for working capital improvements on either side of the supply chain.
Trade finance startup Traydstream names Citi veteran Sameer Sehgal CEO
London-based (Trade Finance) FinTech firm, Traydstream has appointed Citi Bank’s ex – Head of Trade for Europe, Middle-East & Africa (EMEA), Sameer Sehgal, as its Chief Executive Officer (CEO). He brings over 22 years’ expertise in Trade, having held several senior roles over the years.
Traydstream’s Co-Founder and Chief Operating Officer (COO), Uzair Bawany, said of the hire, “In Sameer we have one of the leading figures in global Trade Finance; his appointment is invaluable to us in charting a course for the exciting future for our business”. Sehgal will lead Traydstream through a crucial period for the company, with its first programmes beginning with banks over the third and fourth financial quarters of 2017.
Bank of Georgia seals US$75mn trade finance facility
Bank of Georgia has signed a US$75mn trade finance club deal. The one-year facility was arranged by Citi with Asian Development Bank (ADB) and IFC. ADB supported the facility with a guarantee through its trade finance programme (TFP), and IFC provided funding through its global trade liquidity programme (GTLP), together with Citi.
This is the fourth such deal arranged by Citi for Bank of Georgia.
The funds will be used to support import and export transactions for corporate clients in key sectors including agribusiness, transportation and energy.
“We are pleased to be at the forefront of providing much-needed trade finance products to our corporate and SME clients. The facility will not only diversify and strengthen our client base, but also serve to contribute to sustainable economic growth in Georgia,” says Bank of Georgia CEO Kaha Kiknavelidze.
Maersk seeks role in trade finance as banks retreat
Maersk Line, the world’s biggest container shipper, is venturing into trade finance, as it seeks to fill a lending gap left by indebted banks pulling out of the crisis-hit shipping industry.
Moving into traditional bank territory and further down the shipping value chain, Maersk Line, part of A.P. Moller-Maersk (MAERSKb.CO), is offering to finance shipments and remove the paper trail from financing deals.
Maersk says it has no need to ask for collateral – one of the biggest headaches for banks and customers in trade finance deals – because it is carrying the goods on its vessels.
U.N. role in world finance
GROWING global interdependence poses greater challenges to policymakers on a wide range of issues and for countries at all levels of development.
Yet, the new mechanisms and arrangements put in place over the past four decades have not been adequate to the growing challenges of coherence and coordination of global economic policymaking. Recent financial crises have exposed some such gaps and weaknesses.
Although sometimes seemingly slow, the United Nations (UN) has long had a clear advantage in driving legitimate discussion on reform because of its more inclusive and open governance. Lop-sided influence in the current international financial system is a principal reason why many countries lack confidence in existing arrangements.
Rebuilding confidence in such arrangements will require that all parties feel they have a stake in the reform agenda. But the UN is also suited to drive the discussion because of its long tradition of reliable work on international economic issues.
TradeCap Closes $500K Trade Finance Facility With Colorado Toy Company
TradeCap announced the recent closing of a $500,000 Trade Finance Facility with a fast growing,
Colorado based toy company.
The Company experienced exponential growth in FY 2016 and sales through 2Q2017 had already surpassed that of the prior year. In the midst of booking orders for its upcoming holiday season, the Company received a sizeable order from a new customer. The increased order was incremental to the normal seasonal needs and created an inventory finance need over and above what the Company’s existing working capital base could support.
Afreximbank, finance professionals to meet on structured trade finance
The African Export-Import Bank’s (Afreximbank) says it is committed to boosting African trade by enhancing the capacity of African professionals on international trade and trade-related project financing issues.
The bank said that as part of its efforts in this regard, it is organising a workshop for stakeholders on Structured Trade Finance in Cape Verde from Nov. 6 to Nov. 9.
The bank said in a statement in Lagos that the workshop was being organised in collaboration with the Ministry of Finance of Cape Verde.
The statement quoted Dr Benedict Oramah, President of Afreximbank, as saying that the workshop was also an important platform for African bankers and other trade finance practitioners to make major contributions that would boost African trade.
Trade Trends: Blockchain provides opportunity for ‘radical’ trade automation
It’s no secret that the process of global trade is overly manual and could be made more efficient if both the corporations that import and export and the governments that regulate trade were to implement better platforms and processes
The open-source, distributed ledgers known as blockchains are now mature enough to be considered as a viable part of the technology stack for global trade. While implementing it now would be like going to the supermarket via a space shuttle, blockchains are an increasingly relevant part of conversations that surround trade technology, and trade practitioners should take note.
Blockchain was originally designed to support the development of Bitcoin by an individual or group using the pseudonym Satoshi Nakamoto. Blockchain maintains permanent, tamper-proof lists of records, bundles them into blocks, and chains them together where they are distributed through a peer-to-peer network. When changes are made to the information, or ledger, those changes are recorded across the blockchain.
BBVA joins Singapore-based trade finance platform
BBVA has recently joined the Singapore-based Capital and Credit Risk Manager (CCRM) platform as a full member bank.
CCRM is a Digital Market Place providing a secondary market for trade and working capital risks, owned by Tin Hill Capital and supported with a grant from the Monetary Authority of Singapore (MAS) Financial Sector Development Fund.
The trade finance asset distribution business helps improve portfolio risk and efficiency by releasing liquidity, as well as enhancing service to clients. The market-place model of participation of the different financial entities in the platform facilitates benchmarking and negotiation and will help create a sufficient critical mass in this secondary market.
UAE Exchange in talks with blockchain brand Ripple
One of the UAE’s oldest money exchange houses says it is in talks with US blockchain start-up Ripple, over a tie-up to streamline payments.
UAE Exchange is eyeing a deal with Ripple to help it introduce real time, cross-border payments using blockchain technology.
Blockchain is an electronic transaction-processing and archive system that allows parties to track information in a secure network with no need for third-party verification.
It is the underlying technology that facilitates the use of virtual currencies or ‘crypto-currencies’, such as Bitcoin and Bitcoin Cash, which are becoming increasingly popular around the world.
UAE Exchange claims incorporating blockchain into its processes would help it cut the speed and cost of money transfers for its customers. The remittance house has already invested in two other blockchain-related companies within the past six months.
Two senior staff leave Mitigram to set up advisory firm
Chris Hyde and Jaime Gimeno have left Swedish fintech company Mitigram to found Avant Trade Solutions, a trade finance advisory firm.
The firm will help corporates and banks navigate the rapidly expanding fintech domain, while also helping fintech firms steer the complex world of trade finance.
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