- ELP seeks to boost matchmaking between locally based NBFIs and smaller regional banks in emerging markets with global institutional investors
- ELP will provide best practices and capacity building in supply chain finance end-to-end execution
- East, West and Southern Africa are key target markets for ELP’s First Cohort.
- Applications for First Cohort are open until 31st August 2022
13 July 2022 – London. Finverity, the mid-market supply chain finance platform focused on emerging markets, today announces the launch of its Emerging Leaders Programme (ELP). The programme aims to identify, nurture, and grow the future generation of local trade finance leaders in emerging markets and has already selected and onboarded eight African NBFIs (non-banking financing institutions). The typical profile of successful candidates is that of a local fund or NBFI active in or looking to participate in Purchase Order (PO) Finance, Factoring, SCF (Supply Chain Finance) and other types of Funded Trade Finance Products. These are entities with ambitious management teams and business goals that seek to become trade finance leaders in their respective markets.
The ELP is being launched in direct response to requests from institutional investors and lenders in Finverity’s supply chain finance (SCF) ecosystem who are seeking SCF deal flow from emerging markets in their quest to support the real SME sector. Such institutional investors wish to do so by tapping into locally based NBFIs and smaller regional banks to invest directly through them. This will allow them to participate in various trade finance portfolios supporting initiatives such as financial inclusion, SME lending, ESG funding and more. Finverity believes the ELP will become a key driver in its mission to reduce the global trade finance gap that is currently estimated at US$3tn by matching capital allocators with local professionals who employ international best practice standards, ultimately providing SMEs with lower interest rates, better customer service and access to the financial services required to grow.
The issues that most institutional funders face when trying to deploy capital through local NBFIs in emerging markets are as follows:
- lack of transparency and reporting, with the key issues being monitoring the precise deployment of funding and collection rates at maturity
- Operational processes, legal infrastructure, and risk frameworks. The level of sophistication demanded by institutional investors is often significantly higher than the one employed by the average NBFI employed in its day-to-day operations.
- Scalability! Can the NBFI prove it will be able to manage a portfolio of clients 10 times larger than its current book? How will it maintain the quality of origination and ongoing risk monitoring?
Ahanna Anaba, Head of Sales – Digital Solutions & Partnerships, Finverity, commented:
“Marrying international trade finance standards with the local talent and opportunities in emerging markets is a very powerful combination. In our day-to-day work with African banks and NBFIs, we clearly see the strong calibre of trade finance professionals working in Africa, as well as the demand for better priced sources of capital for onward lending. The ELP aims to build capacity, credibility and ultimately scalability of these SME lending portfolios, and we are therefore very excited to be part of the next set of growth stories on the continent.”
Alex Fenechiu, Co-Founder & COO at Finverity, commented:
“Finverity is continuously growing a supply chain finance origination to distribution business focused on the mid-market corporate segment in emerging markets through its own platform. Having developed relationships with both funders and corporates simultaneously, we’ve faced many of the challenges these emerging leaders are confronted with. Similarly, through the nature of our business, we’ve also been exposed to the challenges that exist on the other side of the table, when investors want to deploy capital but need their boxes ticked before they are able to do so.
It became clear to us that there is quite a chasm between where smaller but ambitious local players currently are and where they need to be in order to become “investable” in the eyes of these institutions. We’ve been asked by existing institutional clients to help them get there and we are thrilled to be launching the Emerging Leaders Programme in response.”
The search is on – how to apply to the ELP
The search is on for the future champions in factoring and trade finance credit among local nonbanking financial institutions and smaller regional banks that are developing their supply chain finance activities in emerging markets.
The Emerging Leaders Programme provides access to a heavily subsidized end-to-end solution for NBFIs in emerging markets that are currently running a Factoring, SCF or PO Finance Operation. The Programme has been designed to equip successful candidates to achieve best-practice standards in supply chain and trade finance and includes everything that local NBFIs need to build and scale their business:
- The most advanced end-to-end technology solution for EM supply chain finance
- Tested legal frameworks and methodologies to execute trades for multiple legal structures
- Best in class internal processes and procedures to follow while growing your business
- Introductions to lenders who are looking to deploy capital through NBFIs
The programme addresses all three key challenges for the growth of African trade finance recently identified in a report by the African Development Bank and draws on Finverity’s expertise of the trade finance needs of mid-market corporates in emerging markets. The programme has already been met with strong success, with the initial cohort of eight NBFIs hailing from Ghana, Nigeria and Kenya.
Applications remain open until 31st August 2022 from NBFIs and smaller regional banks located in East, West and Southern Africa. Full details and application contacts are available here. Direct queries can be addressed to firstname.lastname@example.org
Finverity was born out of a vision to make the global financial system work for all, one product at a time. The company is on a mission to bridge the $1.7trn global trade finance gap by channelling capital to where it’s most needed: mid-market companies in emerging markets, which make up the bulk of the gap. Finverity’s award-winning Supply Chain Finance (SCF) technology caters to the entire ecosystem of Trade Finance participants and is made available via two routes:
- A digital platform that directly matches bank and non-bank funders with pre-qualified mid-market companies seeking supply chain and receivables finance. The platform provides a seamless origination, transaction servicing and risk management reporting infrastructure.
- A truly end-to-end cloud-based SaaS solution for banks and non-bank funders enabling full digitalisation of their invoice finance business, inclusive of client portals, onboarding modules, in-house process workflows, automatic disbursals and reconciliation.
Backed by multiple venture capital funds, Finverity is growing rapidly and building a world-class team to capitalise on the digitalisation trends in trade finance, the increasing need for working capital amongst corporates and an influx of funders searching for yield in this alternative asset class.
For more information and application to the ELP, click here.
About the African trade finance market
According to the African Development Bank (AfDB), there is limited understanding of the trade finance market in Africa, mainly due to a lack of data.
To help fill some of the knowledge gap, for the first time, the AfDB, conducted a deep-dive analysis of the trade finance market in Kenya and Tanzania, using data from 58 commercial banks and 804 firms across multiple sectors. The report published in May 2022 is the most comprehensive study combining demand- and supply-side data to understand the trade finance market in Africa.
The report outlines policy recommendations to help support the trade finance market in Africa, including the need to (i) address the structural issues of low creditworthiness and insufficient collateral, (ii) develop innovative trade finance instruments to support discouraged trade finance applicants, (iii) support the digitization of trade finance transactions to reduce delays in processing and to minimize bureaucracy