Finverity solution provides real-time connectivity to 18 accounting packages via quick-integration API

• This allows banks & funders to make informed credit decisions on lending to both SMEs and Corporates alike, rather than rejecting them due to insufficient data

• Finverity’s API is available on ADGM’s Digital Lab and on the Finverity platform to funders globally

• SMEs are severely underbanked in the UAE with only 5% of lending volumes flowing their way. This is due to a lack of credit data and visibility

• Expected results include: Increase in local SME lending, shorter time taken to reach credit decisions, better monitoring and ongoing risk control of active supply chain finance exposures

Finverity, the award-winning mid-market supply chain finance (SCF) platform focused on emerging markets, is pleased to announce the launch of its real-time monitoring Credit Data API. UAE banks and investors will be the first to benefit from the stand-alone solution due to the UAE’s leading position as a key trade finance hub for Finverity. In parallel, the API functionality is now also available to funders globally on the ADGM’s Digital Lab and Finverity’s platform.

The launch marks the successful completion of Finverity’s proof-of-concept commissioned by ADGM (Abu Dhabi Global Market) as a result of winning FinTech Abu Dhabi’s Innovation Challenge 2020.

Finverity has developed an easy-to-integrate API (Application Programme Interface) solution that provides near real-time access to the financial data stored within SMEs’ accounting packages. This level of access to near real-time SME financial data is unprecedented, especially for banks and other financial institutions in the MENA region. The latter will now be equipped with sufficient data to make well-informed underwriting decisions on SMEs as well as Corporates.

This will reduce the current high level of SMEs’ loan rejection rates caused by lack of financial data. The API also reduces the time it takes for a funder to process a loan application and disburse funds, commonly known as “time to cash”.

Game changer for payables and receivables finance

The availability of near real-time quality credit data is a game-changer for payables and receivables finance. Given that a funder’s average exposure to an SCF transaction is short-term, (3 months rolling on average), a funder needs to be able to quickly identify any credit issues as they arise. The launch of near real-time data means that funders are now able to detect deterioration in credit quality sufficiently early and therefore terminate a transaction with no or minimal losses.

In the same way, funders can choose to increase a limit if the credit quality indicators are showing improving trends. All funders onboarded on the Finverity platform will be able to benefit from the new Credit Data API.

Finverity’s API currently supports 16 cloud and 2 on-premise accounting integrations including Oracle NetSuite, Sage Business Cloud Accounting, Zero and Kashoo among others. The Finverity API is available on ADGM’s Digital Lab and the Finverity platform.

Creating a level playing field for SMEs and Mid-caps

Evaluating the credit risk of small and medium-sized enterprises (SMEs) is one of the most challenging tasks in lending. Whilst differences exist globally, the typical challenges arise from dated or non-existent financial data, lack of trust in the governance of such entities and expensive and unreliable monitoring processes that are dependent on the borrowing entity’s staff providing timely information. Due to the high onboarding and operational costs compared to profit generated, it was often not economically viable for banks to engage with smaller suppliers and mid-market corporate buyers, despite many mid-market SMEs having a strong credit standing. By digitalising and automating the credit assessment process, Finverity’s API dramatically reduces these costs, enabling greater financial inclusion for SMEs.

The UAE’s mid-market sector has in the past found it harder to engage with SCF programmes compared to larger corporates. The SME sector is key to the growth and diversification of the UAE economy. Although local SMEs represent 95% of companies in the country and 86% of the private sector’s workforce, they account for only 5% of total bank lending in the UAE. While UAE SMEs’ share of domestic credit leads other countries in the region, it is still well below the levels in developed markets.

Viacheslav Oganezov, CEO and co-founder, Finverity, commented: “We are delighted to be launching Finverity’s Credit Data API at a time when efficient and transparent solutions to foster global trade are needed more than ever given the recent growth in the trade finance funding gap to $1.7trn. As global trade continues to evolve, the UAE has the potential to strengthen its position as a key global trade finance centre, and make use of solutions that help allocate capital more safely and wisely based on better data and increased transparency. Fintech platforms are essential in facilitating this process. Finverity’s credit data enhancement API offers an attractive ‘plug and play’ solution that requires little time and cost to implement. With SMEs playing a crucial role in global trade, improving their access to financing is a key step towards reducing the current global trade gap.”

Alex Fenechiu, COO and co-founder, commented: To allocate capital efficiently, investors need to have both the most up to date historical information available as well as understand what is happening to a company in near real-time. Near real-time information gives funders the data points to take action quickly and avoid the problem of acting “too little, too late”. This makes a big difference as traditionally funders receive backdated financial data from borrowers that are up to 6 months old, by which time it is too late to take meaningful action. Finverity’s Credit Data API allows funders to identify and distinguish with much higher certainty between borrowers’ creditworthiness and allocate capital more efficiently, rewarding the better borrowers and avoiding the “free riders” who have benefited from the lower quality credit data provided by SMEs until recently”.

Wai Lum Kwok, Senior Executive Director, FSRA, Abu Dhabi Global Market, commented: “SMEs are core contributors to the UAE’s economic growth and diversification. The FSRA welcomes scalable solutions that improve financing conditions for SMEs, including those that significantly reduce processing costs through automation. The availability of high-quality credit risk data on UAE SMEs will help attract a substantially larger pool of funding capital and remove obstacles to their growth. The publication of Finverity’s API on the ADGM Digital Lab is also an exciting step as it allows interested parties to consume and test the tool and evaluate the solution prior to a formal procurement process.”

About Finverity

Finverity was founded in London in 2017, with the goal of helping to fix the global trade finance gap.

The Finverity digital ecosystem provides the technology, working capital and expertise to make trade and supply chain finance (SCF) actually work for businesses, banks and NBFIs. The digital ecosystem comprises of two complementary offerings:

Finverity Capital, tailored trade and SCF solutions, with two core products:

1. Finverity CapitalAccess empowers ambitious privately-owned businesses to seamlessly access working capital and reach their next level of growth.

2. Finverity CapitalInvest enables funding partners to deploy capital into quality trade assets securely, easily and at scale.

FinverityOS (SaaS), the 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 is growing: In 2022, it increased revenues by 15x, doubled its headcount and initiated expansion into three new international offices. Finverity is backed by 5 world-class VCs and serves clients in 11 countries across the Middle East, Africa and Central & Eastern Europe.

About ADGM

Abu Dhabi Global Market is an award-winning international financial centre strategically located in the capital of the United Arab Emirates.

Established by UAE Federal Decree, ADGM’s jurisdiction extends across the entire 114 hectares of Al Maryah Island. ADGM’s three independent authorities – the Registration Authority (RA), the Financial Services Regulatory Authority (FSRA) and ADGM Courts – together ensure that its business-friendly environment operates in line with international best practices, recognised by major financial centres worldwide.

Since opening for business in late October 2015, ADGM quickly gained global recognition for its robust, progressive and responsive business-friendly ecosystem. Through collaboration, and by focusing on understanding business needs, ADGM introduced many ‘firsts’ both regionally and globally. As a catalyst of growth, ADGM delivers value to its clients and its peers and contributes to Abu Dhabi’s ambitious growth plan and strategy.