Demica technology opens new doors to supply chain finance in Nigeria

Demica technology opens new doors to supply chain finance in Nigeria

Published 2nd May 2024 by Demica in News

Afreximbank and Sterling Bank partner to provide approved payables finance to Nigerian businesses and suppliers using Demica’s advanced, world-class supply chain finance technology.

Demica, the leading fintech specialising in supply chain finance solutions, announces its cutting-edge approved payables finance technology is underpinning the expansion of supply chain finance to Nigerian businesses, including SMEs, transforming working capital optimisation and liquidity through a new banking partnership.

African Export-Import Bank (Afreximbank) and Nigeria-based Sterling Bank have partnered to introduce the innovative AFREXIMBANK TRADELINK in Nigeria, leveraging Demica’s proven payables finance technology as well as its intuitive supplier onboarding tool. By partnering with Demica, Afreximbank and Sterling Bank are providing a major opportunity for Nigerian businesses to benefit from payables finance, a solution with multiple advantages for both buyers and suppliers.

Demica is a leading global fintech specialising in working capital solutions built on a track record of trust and achievement. The company has been working with Afreximbank to provide payables finance across Africa as part of Afreximbank’s strategy to boost Africa’s share of global trade.

The new partnership in Nigeria is a unique, innovative arrangement which leverages the complementary strengths of both banks to provide a comprehensive market-leading solution to Nigerian corporates and their suppliers. Under the partnership, US Dollar and Euro financing is provided by Afreximbank and 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.

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 ultimately 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.

AFREXIMBANK TRADELINK, is part of Afreximbank’s digital Africa Trade Gateway (ATG) which provides African corporates and banks with the digital tools they need to access market information and connect with buyers and sellers across the continent. This aim is to achieve efficient marketing and procurement, facilitate Know Your Customer (KYC) procedures, and effect trade payments between African countries in local currencies.

Gwen Mwaba, Director and Global Head, Trade Finance, Afreximbank, said: “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. 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.”

Mr 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.”

Maurice Benisty, Demica’s Chief Commercial Officer, said: “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.”

About Afreximbank

African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. For 30 years, the Bank has been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Working with the AfCFTA Secretariat and the AU, the Bank is setting up a US$10 billion Adjustment Fund to support countries to effectively participate in the AfCFTA. At the end of December 2023, Afreximbank’s total assets and guarantees stood at over US$37.3 billion, and its shareholder funds amounted to US$6.1 billion. The Bank disbursed more than US$104 billion between 2016 and 2023. Afreximbank has investment grade ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). Afreximbank has evolved into a group entity comprising the Bank, its impact fund subsidiary called the Fund for Export Development Africa (FEDA), and its insurance management subsidiary, AfrexInsure, (together, “the Group”). The Bank is headquartered in Cairo, Egypt.

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About Sterling Bank

Sterling Bank is a leading financial institution that delivers innovative financial solutions to millions of customers across Nigeria with a branch network spanning all states and regions within the country.

Sterling Bank operates a robust portfolio of innovative digital products and services focused on empowering businesses and individuals in its commitment to consistently accelerate growth in the Nigerian economy.

The bank, renowned for its HEART strategy which focuses significant investments in the Health, Education, Agriculture, Renewable Energy and Transportation sectors of the Nigerian economy, has consistently played a pivotal role in the development of the Nigerian economy.

About Demica

Demica is a market-leading fintech, powering the trade finance programmes of the world’s largest trade banks and corporations. Demica’s proposition is simple: our intuitive, cloud-based platform enables financial institutions and corporates to automate and scale their working capital solutions. Trusted by major global organisations, Demica has US$28bn of Assets under Administration, across the full spectrum of working capital products. Funded by a diverse range of banks and institutional investors, these programmes enable companies to strengthen their supply chains and redeploy capital to drive growth.

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