ICC and Finastra Introduced SME Trade Finance Marketplace Pilot To Ecuador
As per the latest reports, the International Chamber of Commerce (ICC) and fintech company Finastra have declared Ecuador to be the first market to execute the pilot of their new SME trade funding marketplace. Earlier, ICC provides guidance to the trade finance market to address COVID-19 disruptions
ICC Tradecomm, which relies on Finastra’s technology, was first declared in March this year while an ICC spokesperson explained that this web-based platform will empower SMEs to get the finance from banks and non-bank lenders on their online invoices, with transaction risks and diligence scoring executed using an automated Know Your Customers (KYC) and Know Your Transactions (KYT) engine.
As per the spokesperson, “Once the SMEs get confirmed by the ICC Tradecomm KYC engine, the new willing members will be capable of uploading invoices which will be risk scored and submitted to lenders for funding. ” Further added that the organized KYC and KYT process will “support the economic sustainability of lending disrupted markets to SMEs with a variety of options of risk profiles.”
Related Read: How Fintech Is Driving Financial Growth To SMEs To Survive From Pandemic?
John WH Denton AO, Executive Director of the ICC explained, “We are very glad to declare Ecuador as our first pilot market for ICC Tradecomm. We are operating with partners in the areas of Finastra and Quito to facilitate SMEs with short-term liquidity for their business activities. We look forward to it. As our worldwide trading system keeps disrupted, business leaders & global agencies are shifting to pre-pandemic levels by facilitating the solutions and financing required for SMEs. We are committed to bringing it back. Since the SMEs create 99% of Ecuador’s business, we hope ICC Tradecomm will likely have a significant impact on regional businesses across the nation. ”
As per ICC, the marketplace focused on mitigating trade finance difficulties for SMEs and empowering all members to get advantages from upgrades in suitable supply and demand, consequently reducing the worldwide US$1.5tn trade finance gap. Through this entire process, the only agenda of ICC Tradecomm is to facilitate aid to SMEs to further develop their risk financing profile over time through education and proper guidance.
Carlos Zaldumbide, General Secretary of ICC Ecuador explained, “Ecuador is quite appropriate for pilots as it has gained economic development backed by solid SME support. We are already in the process of introducing an electronic billing initiative to our nation, which will be an extremely complementary step to make a difference. ”
Related Read: Trade Finance & SMEs - Reasons Why SMEs Opt For Trade Finance
The World Bank research says that 99% of Ecuador's 900,000 organizations fall into the category of microenterprises and SMEs that generate 60% of all job opportunities. Ecuador is also a global leader in female-driven businesses. These areas have limited access to finance and thereby struggle through several challenges for keeping up their productive activity.
Simon Paris, CEO at Finastra says, “We all commit to restructure trade finance services for goods and to assist with bringing worldwide financial uniformity of opportunity. In coordinating this ecosystem with the ICC, we hope to create a financing marketplace that will help in boosting SMEs desperately looking for a suitable comprehensive set of alternative financing resources. Ecuador is a developing, emerging market and we hope that this trial will show how we can guide providing crucial levels of trade financing for regional businesses, making the platform that will then empower ICC Tradecomm to further enable more markets where we might provide billions of dollars in trade. ”
The world doesn’t have a lack of SME financing marketplaces. In recent months, Surecomp, dltledgers, and MarketInvoice, to give some examples, have introduced similar suggestions. However, it was told by an ICC spokesperson that ICC Tradecomm separates itself through accessibility, liquidity, productivity, and the ICC network.
“ICC Tradecomm is likely to facilitate smooth & easy access to lenders, designated data to SMEs to further develop scoring, such as access to financial education, and lucidity of procedures and transactions. The marketplace will help in bringing huge numbers of lenders together to boost the accessible pool of capital and facilitate a straightforward bidding process enabling SMEs to fulfill their working capital requirements. ” The spokesperson added, “ICC Tradecomm facilitates an organized risk management process where customers can access their risk capability and restrictions via the marketplace directly. ICC Tradecomm will also operate hand-to-hand with reliable regional partners from the ICC network guaranteeing an ideal product-market fit, local product acknowledgment, trust & credibility. ”
Related Read: Singapore: Sanctions Clauses And Trade Finance – Recent Further Guidance From The International Chamber Of Commerce
The ICC explains that new business sectors for extra pilots have effectively been distinguished and will be uncovered soon.
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