This post originally appeared on Trade Financing Matters.
I recently had a few discussions with corporates who have rolled out Supply Chain Finance (or Approved Trade Payable) programs with their supplier base. These corporates have been running programs for several years so I thought it would be good to get some feedback on how the programs are progressing.
Here are seven quick facts that seem to be consistent with programs:
- Programs are expanding into different geographies and offering local currency funding – some large corporations now run programs in 10+ currencies. Expanding into local currency funding helps fund factories in local markets.
- These programs are still predominately with Investment Grade or near Investment Grade corporations. We still have not cracked the code on selling programs to below investment grade and middle market corporates.
- Most growth in SCF programs is through adding divisions and subsidiaries and not new companies.
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