The Time is Right to Consider Supply Chain Finance

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Given the seemingly constant news coverage of disruptions with the global supply chain, it may be surprising to learn that global supply chain finance volumes are on the rise. In fact, according to the 2022 World Supply Chain Finance Report published by BCR, from 2020 to 2021, global supply chain finance volume grew by 38% to $1.8BN.

This increase is without a doubt, a positive for industry players who have long extolled the benefits of supply chain finance. However, one of the most important benefits of supply chain finance is often overlooked by the very buyers and sellers in need of it, and the important role supply chain finance plays in portfolio diversification. Diversification is the key to managing risk in any portfolio, especially during inflationary periods.

The June 2022 World Economic Situation and Prospects Briefing from the United Nations Department of Economics & Social Affairs projects global inflation to increase to 6.7 percent in 2022, twice the average of 2.9 percent recorded during 2010–2020.

With exacerbated inflationary concerns, a well-implemented supply chain finance program can effectuate a positive impact for many businesses. Integrating supply chain finance into a company’s financing toolkit enables cash flow and payments efficiencies – along with greater visibility – for both buyers and sellers, but it also helps provide the ongoing working capital needed to keep a business moving forward. All of which is particularly useful in managing through disruptions.

Having your ‘eyes wide open’ on payments and available cash also goes a long way toward managing debt, which is critical in an inflationary environment. Managing debt is key to maintaining a good credit rating. After all, lenders want to know that their clients have a good credit rating and track record for repayment of loans before they issue them a new one.

We live and work in an increasingly interconnected global economy which brings many benefits to nations and companies alike. With benefits also comes exposure to risk of many regions, not just at play within your own borders. It should come as no surprise that there continues to be an accelerated rate of development and adoption of technologies to digitize supply chain and trade finance, given the increased market interest and an increasingly global and interconnected economy.

Digitization creates the opportunity for greater speed, security, and efficiency and even greater globalization of trade. Companies across the trade finance landscape know they should be leveraging technology to improve onboarding and verification procedures, reduce the risk of fraud, and deliver the seamless experience their customers deserve, among other things. But most do not have a clear path to get there.

As a leader in digital trade, Triterras finance opportunities are accessed through a deep global bench of origination, structuring, and distribution professionals that leverage our blockchain-enabled technology. But unlike traditional access points to trade finance, Triterras offers an efficient and risk-mitigated approach through its deep and experienced team and the Kratos platform.

Triterras believes the trade finance opportunity is massive and underserved. It features strong yields, low default rates and compelling strategic benefits in today’s economy. Triterras enables a path to overcome current challenges faced by new lenders entering the trade finance lending business and the ability to continuously innovate to stay ahead of changes in the global market.

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