GT Nexus and IFC deliver Supply Chain Finance to Emerging Markets

Garment Factory

GT Nexus provides the platform in certain markets to help the International Finance Corporation (IFC) implement supply chain finance programs. IFC is the private sector arm of the World Bank group to encourage private sector development in emerging markets. For example, Levi Strauss & Co. works with apparel manufactures in Sri Lanka, Bangladesh, etc. Some of the large manufacturers would like to use Levi receivables to raise cash.

This is where the IFC steps in. IFC provides suppliers in emerging economies with access to competitively priced financing through their Global Trade Supplier Finance (GTSF) program. This allows program members to sell invoices to IFC for early payment on a “true sale” non-recourse basis at rates based on their customer’s credit rating.” In Levi’s case, suppliers in Bangladesh are able to access financing at rates that are 320 basis points above Libor.

GT Nexus provides the cloud solution to manage the purchase order release and all the downstream activities from there. Order is visible to all parties. Reusing PO data, the factories can use Packing Lists, ASNs, tracking order and recycle. What is valuable about their platform is they can take the Purchase Order and make it visible to all parties. This automates the global supply chain platform with a layer of services (providers include Coface credit insurance, Forwarders, funders, guarantees, early pay, money movement, etc.). The platform provides real time visibility into whats going on.

The IFC’s additional value is to certify factories to determine if they are environmentally responsible. If they pass, early payment is funded by IFC using GTNexus platform.
This is one example of how a cloud based platform can reduce risk by providing visibility to actual electronic data between suppliers and their customers: orders, invoices, amendments, open shipment balances, payment history and other risk assessment information.

What makes GT Nexus platform unique so far is their connections to carriers to track global shipments. Many of the other B2B and supplier networks have the Purchase order data and the information on what was bought, delivered, etc. but it comes only from the Buyers platform, not the networks.

It will be interesting to watch if GT Nexus can transform themselves into a deep financial player that goes well beyond approved invoice financing. With the IFC partnership, there is great potential.

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