How a Nigerian startup and Finverity are taking the first steps towards revolutionising supply chain finance in Nigeria.

Fulcrum, a Nigerian platform backed by C-One Ventures aims to expand its supply chain finance (SCF) offering in Nigeria, boost revenues, and unlock billions in trapped capital for SMEs.

Case study highlights:

• The market opportunity for supply chain finance in Nigeria is vast, and C-One Ventures is bullish about the product becoming accessible to SMEs.

• By streamlining processes, reducing turnaround time, and leveraging technology, C-One Ventures, through its platform, Fulcrum, will enhance its SCF capabilities and test the Nigerian SCF market.

• Fulcrum fully implemented FinverityOS within 30 days to leverage Finverity’s supply chain finance technology and expertise.

Plugging the trade finance gap

The so-called trade finance “gap” is a familiar frustration to many millions of businesses. A recent report by the World Bank put the gap in developing markets alone at $1.5tn in 2020. After the pandemic, another estimate put it at $6.5tn.

Either way, it means SMEs who would otherwise see strong and sustained growth are restricted, sometimes critically so, by access to capital. For big corporates, supply chain finance has given them a means by which to expand access. SMEs and mid-market corporates have not had that luxury. Fulcrum wants to change all that.

The platform plans to expand its supply chain finance offering by partnering with Finverity. Using its end-to-end operating system, FinverityOS, it plans to unlock revenue, streamline processes, and realise radical efficiency gains not just for its partners, but for SMEs in Nigeria and beyond. It has attracted the attention of one of the technology-focused banks in Nigeria.

Opening the door for SMEs

Supply chain financing (or reverse factoring) gives suppliers access to early payments on their invoices. These payments are facilitated by a funder, usually a financial institution, and authorised by the buyer. It means both the buyer and seller have more flexibility on the payment and financial settlement, but it also greases the wheels of global trade by giving suppliers sometimes-instant access to capital. Everyone benefits. Fulcrum wants to make this process faster and better with technology.

In Nigeria, the opportunity is huge. The International Finance Corporation (IFC) estimates that the market for SCF in Nigeria is approximately ₦2.7 tn. They also suggest that supply chain financing could lift Micro, Small, and Medium Enterprises (MSMEs) in Nigeria to a different level altogether. Currently, only 24% of the market is serviced by SCF, which is again where Fulcrum sees the huge opportunity.

By streamlining processes, reducing turnaround time, and leveraging technology, Fulcrum will unlock SCF opportunities with minimal manpower investment. Finverity will provide the technology and support it needs for the disruption. While the partnership marks an important moment for the platform and its backers, it’s also an unmissable opportunity for many thousands of SMEs in Nigeria.

Fulcrum believes that the opportunity in the Nigerian SCF market is enormous and the traditional banks have not been able to scratch the surface with loan products. Fulcrum, through its partnership with banks and other funders, is targeting up to 0.1% of the SCF market in its test phase; with plans to expand to 1% as the market deepens.

Building for the future

Currently, most banks offer two SCF products: distributor finance and seller-led financing (receivable discounting/invoice financing). Fulcrum wants to deepen Payables Finance. It also wants to reduce the turnaround time from financing request to issuance, down from 5-14 days to 48 hours or less by helping its users and banking partners fully automate at least half of their transactions over the same period.

To help with the implementation, Finverity will run a series of trainings, pre- and post-delivery, so that the Fulcrum team can confidently make any changes they need. Using FinverityOS, they can streamline their whole operation by digitising processes and automating repetitive tasks. Better yet, Fulcrum and its partners can manage all of their working capital products on one operating system.

Fulcrum believes that this is the right time to expand into the last frontiers of trade finance in Nigeria - inflation is high, prices are unstable and small businesses need instant access to cash to stock up for future orders. The ability to unlock payments for suppliers within hours will revolutionise the financial sector in Nigeria.

For the many thousands SMEs in Nigeria and beyond, they can, thanks to Fulcrum’s partnerships with anchors and funders, finally access finance from non-traditional channels. Together, Fulcrum and Finverity are fully committed to bridging the working capital gap in the region. Time will tell how much of an impact the two will make, but the signs – for the first time in a long time – are positive.

“The SCF market in Nigeria is largely untapped, and dominated by inefficient systems. Our integration with FinverityOS has helped us focus on the core of our business strategy - making the right connections between funders, buyers and suppliers”

— Fulcrum Squad

About Fulcrum

Fulcrum is a technology and financing platform developed by C-One Ventures (a venture capital) to unlock working capital for suppliers in Nigeria through payable finance and other SCF products.

Fulcrum connects buyers, funders and suppliers in a seamless ecosystem that provides stable financing to supply chains.

About Finverity

Finverity was founded in London in 2017 to help fix the global trade finance gap. It connects trade and channels capital with cutting-edge technology, and enables more businesses globally to reach their true growth potential.

Finverity offers two distinct business offerings:

• 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.

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

Get a supply chain finance solution that actually works

Speak to our team about how FinverityOS can unlock revenue, streamline your systems, and realise radical efficiency gains for your growing business – all in just 30 days.