How Redington launched a distributor finance programme to support channel partners in the MENA region and drive increased revenue.

Redington used FinverityOS to overcome the shortcomings of ‘traditional’ finance and build a reputation as a trusted, long-term partner to its many resellers

Case study highlights:

• Better relationships: Redington's network of channel partners are using extended credit terms to buy more stock and in turn, grow sales.

• Faster execution: FinverityOS automates processes, reduces manual errors, and accelerates turnaround time for financing.

• Full transparency: Redington gets real-time visibility on sales capacity to each channel partner.

• Industry recognition: NBF won the Best Innovation in Trade Finance at the MEA Finance Banking Technology Awards 2023.

From ignored to indispensable: your supply chain is your competitive advantage

Global inflation, labour shortages and supply chain disruptions have touched all businesses and sectors. Businesses are moving from “Just in time” to building resilience and diversity into their supply chain. It means you must necessarily hold more stock for longer.

Against such tight financial conditions and the wholesale restructuring of supply chains, suppliers are requesting earlier payments, placing pressure on buyers who are faced with cost pressure and volatile demand. After several years of record-low interest rates and operations that relied upon access to cheap cash flow lending, working capital has risen to the top of the C-suite agenda. 

Redington: winning in the new normal of global supply chains

Redington Gulf is a leading integrated logistics, professional services provider and technology distributor with over 200 warehouses, mainly in the Middle East and Africa. Its distribution business relies heavily on thousands of channel partners (resellers) and recent global economics have surfaced a need to re-enforce their supply chains and accelerate business growth.
Instead of letting this impact its growth prospects, Redington sought out a scalable solution that allowed it to accelerate growth: a distributor funding programme that would make it easy to extend payment terms for its many channel partners (resellers).

Supply unchained - challenges with ‘traditional’ finance solutions

Distributors like Redington, and their diverse supply chain ecosystem, are an increasingly attractive client set for banks. They are growing quickly, need a wide range of banking products across geographies, and are viewed as low risk due to their short-term funding requirements.
However, without technology solutions, banks cannot execute and scale transactions of this nature. Issues include: 

1. Slow manual processes: Existing trade finance processes rely heavily on manual paperwork, leading to delays, errors, and inefficiencies. They cannot support the speed expected of this sophisticated client base. This also drives the cost of servicing and scaling such facilities to unsustainable levels.

2. Lack of transparency: The absence of a centralised platform makes it difficult to track and verify transactions across multiple parties involved in the supply chain.

3. Operational risk: The complexity of the transaction and the reliance on manual processes increases the risk of errors, fraud, and delays

With little opportunity to offer value-added service, insights or experience, banks end up competing on price and acting as a commodity provider among multiple facilities. This leaves large corporates with operational difficulties when managing multiple facilities with a range of banks.

The solution: NBF’s new digital distributor finance offering

Finverity’s distribution team held conversations with several potential funders and, after careful consideration, selected and agreed terms with National Bank of Fujairah (NBF). Following a series of interactive training sessions, this transformation brought significant improvements in NBF’s distributor finance offering:

Increased new business and customer satisfaction

Redington oversaw a seamless and efficient financing process, enhancing their experience with NBF and deepening their relationship by increasing access to Redington’s channel partners.

Flexible financing

FinverityOS allowed the bank to customise funding parameters, workflow processes, and the level of checks and balances within the programme. This gave the bank the ability to go deeper into the supply chain and provide appropriate solutions for different tiers of distributors - all on one platform.

Enhanced Efficiency and Transparency

Automated processes reduced manual errors, streamlined sharing and processing of trade documents, and accelerated the overall transaction timeline. Real-time visibility into the supply chain improved trust and transparency among all parties involved, leading to smoother operations and reduced disputes.

“We’ve been scouting for a trade finance platform to work with for some time, but all of them came across as not worth the implementation and onboarding effort. Finverity is different. Beyond the technology offering, they provide deal origination and structuring and have the experience necessary for smooth roll-out and scaling of such deals.”

— Venki Ramsubramoni, Head of Equipment & Technology Finance at NBF

New and improved relationships

The partnership with Finverity marks the beginning of a new era for Redington and NBF as FinverityOS is neatly embedded into the daily operations of both parties.

NBF has transformed how they work with Redington, from ad-hoc transactions with capped revenue potential to becoming a trusted partner at the core of a growing distributor programme.

Finverity’s platform is embedded in NBF’s operational and credit approval processes, providing a seamless experience to NBF and enabling it to quickly scale up the programme. After onboarding, a few clicks by both parties is all that’s needed for funding to take place. This novel digitisation initiative has won NBF industry awards and recognition across the region, as well as improved NBF’s performance across a range of new business and existing business KPIs.

For Redington, this embedded financing means their channel partners profit from extended payment terms to comfortably turn stock into cash. It also opens up additional working capital to purchase more stock from Redington and meet growing demand for technology products. 

Now, Redington’s distributors can play a much bigger part in boosting regional economic growth. This, ultimately, underpins the role of technology as a key growth driver in developing economies.

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About Finverity

Finverity was founded in London in 2017 to help fix the global trade finance gap. Through its technology and expertise, Finverity enables the flow of capital, empowering more businesses globally to reach their true growth potential.

Finverity offers two complementary value propositions:

• Finverity Capital - The supply chain finance product suite that connects corporates seeking working capital (Finverity CapitalAccess) and funders looking to deploy capital (Finverity CapitalInvest).

• FinverityOS (SaaS) - An end-to-end operating system designed to digitally transform trade and SCF operations, client experience and revenue generation capabilities at local and regional banks and NBFIs.