Business access to finance can be challenging for small- and mid-sized enterprises (SMEs), yet these businesses are critical to local and national economies. To boost access to financing for its SMEs, our client, a Development Bank, wanted to launch an e-platform-based service.
They engaged Momentus (formerly IFCL) to assess the feasibility of establishing a supply chain finance e-platform for reverse factoring. We also helped them operationalize the platform.
The e-platform is designed to meet four key goals: enhance SME access to trade and supply-chain financing by filling existing market gaps in this sector; nurture an enabling ecosystem in the Caribbean to incentivize commercial intermediaries to engage in trade and supply-chain financing with SMEs clients; strengthen intraregional transactions; and promote increased liquidity among the private sector to finance working capital needs while simultaneously assisting SMEs overcome restrictions posed by lack of traditional collateral.
We conducted a feasibility analysis of structuring and implementing a facility in the region, offering an array of trade and supply chain finance instruments. This included consultations with other successful regional supply-chain finance platforms to draw lessons learned. We then developed an institutional and financial structure for such a facility and for the instruments deemed feasible and most convenient. We advised on the arrangements and configurations required to effectively develop and implement the instruments.
This project is designed to help develop new avenues for SMEs to access financing and help local businesses and economies grow.