DP World Trade Finance recently announced that it is partnering with Nedbank Corporate and Investment Bank to support businesses across sub-Saharan Africa that face working capital challenges.
The partnership includes initiatives in supply chain finance for DP World’s suppliers in sub-Saharan Africa (SSA) and a risk-sharing agreement to enhance the trade finance availability to businesses across the region. These trade finance solutions will enable businesses to move their goods faster and further, helping them improve their working capital while also enabling the flow of trade.
“Our partnership with Nedbank represents a significant step forward in addressing the trade finance challenges that have impacted the growth potential of businesses across sub-Saharan Africa,” stated Mohammed Akoojee, CEO and managing director for sub-Saharan Africa at DP World.
Supply chain finance program
Under the agreement, DP World Trade Finance has implemented a supply chain finance program on its platform, with Nedbank CIB as the financer. The program enables DP World’s suppliers in the SSA to access early payments on their approved receivables. The program also addresses the working capital constraints that suppliers face, offering a more economical financing option compared to available traditional solutions in the market.
“By combining our expertise in structured finance with DP World’s logistics network, we are well-placed to tackle the region’s trade finance challenges. This collaboration improves trade flow, empowers businesses to navigate a challenging economic environment, and unlocks new growth opportunities,” stated Anél Bosman, group managing executive at Nedbank CIB.
Risk-sharing agreement
Nedbank CIB and DP World Trade Finance also signed a risk-sharing agreement to allow both firms to share risk in mutually beneficial transactions, thereby increasing the overall credit available to clients.
Among those initiatives is the Virtual Farmer program, established by Specialized Agri Solutions (SAS). Through this program, the platform and Nedbank CIB will collaborate to provide greater credit to farmers, ensuring they have the necessary working capital to procure inputs such as seed, fertilizer and diesel for crop cultivation. This program, which has been running for the past 12 seasons, exemplifies the impact of such structured trade finance solutions.
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Access to trade finance solutions
A significant portion of trade from the region originates from businesses that face challenges in accessing trade finance solutions that would allow them to participate in global trade opportunities. These obstacles stem from the limited availability of data on creditworthiness, as well as a lack of visibility and control on the underlying trade, which exaggerates the perceived risks within the supply chain.
Therefore, DP World launched DP World Trade Finance to bridge the trade finance gap, connect businesses with financial institutions, and provide trade finance facilities directly from its own balance sheet.
“By combining DP World’s logistics capabilities with innovative financial solutions, we are not only enabling our suppliers to thrive but also fostering a more transparent and efficient trade ecosystem,” added Akoojee.
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