Unlocking growth, empowering SMEs

The supply chain finance solutions from Demica, a leading fintech, has been selected by African Export-Import Bank (Afreximbank) and Sterling Bank to provide approved payables finance to Nigerian businesses and suppliers

Afreximbank and Sterling Bank partnered in order to introduce the AFREXIMBANK TRADELINK in Nigeria and chose to leverage Demica’s proven payables finance technology as well as its supplier onboarding tool. This arrangement is described by unique for Nigeria and will utilise the stengths of both banks to provide a comprehensive solution to corporates and suppliers in the West African country. Under the partnership, the US Dollar and Euro financing is provided by Afreximbank while financing in Naira is provided by Sterling Bank. Suppliers to Nigerian corporates can thus benefit from financing in both local and foreign currency as per their requirements.

Abubakar Suleiman, managing director of Sterling Bank, commented, “Sterling Bank is committed to meeting the trade finance needs of Nigerian corporates and their suppliers and we are proud to introduce this much-needed product for the benefit of Nigerian businesses in partnership with Afreximbank.”

Africa payables finance

The payables finance product enables suppliers to access funding by obtaining early payment for invoices approved for payment by their corporate buyers. The buyers continue to receive trade credit from the suppliers, and the suppliers monetise their trade receivables through the early payment received, enabling them to improve their working capital position and grow their business. The financing cost is linked to the credit rating of the corporate buyers, thereby making this product particularly valuable for SME suppliers who may face challenges in accessing bank finance at competitive pricing.

“The launch in Nigeria is a first step in Afreximbank’s plans to introduce payables finance across Africa in partnership with leading African financial institutions,” said Gwen Mwaba, director and global head, trade finance, Afreximbank. “The product, which will deploy world-class technology and a collaborative delivery model, aligns with the bank’s vision of transforming Africa’s trade, and will contribute towards achievement of the bank’s strategic objective of reducing the trade finance gap in Africa, especially for the SME segment.”

AFREXIMBANK TRADELINK, is part of Afreximbank’s digital Africa Trade Gateway which provides African corporates and banks with the digital tools they need to access market information and connect with buyers and sellers.

Maurice Benisty, Demica’s chief commercial officer, added, “We’re thrilled our technology is helping drive forward the expansion of supply chain finance in Nigeria, in partnership with Afreximbank and Sterling Bank. Right across Africa there is huge unmet demand for this type of finance to meet fast-changing requirements for working capital and liquidity, especially in the SME sector. This payables finance solution is going to assist the growth of trade in and from Africa, and further demonstrates the value that these solutions bring to the real economy.”

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