Supply Chain Finance

Overview

The Ecobank Supply Chain Finance provides customers with the necessary working capital to optimize their cash flows and enhance liquidity through financing sales and purchases.

It features Receivables Based Financing, Trade Loans, Inventory/Warehouse Finance and other options. These solutions are designed to meet our clients’ trade requirements. So if you are doing business in Africa, we can provide you with an innovative, end-to-end solution to suit your specific needs. Obtain faster access to your funds through an efficient network in the countries in which Ecobank operates.

With the largest network in Africa, than any other bank in the world, Ecobank provides comprehensive solutions for business clients.

Accurately forecasting cash flows, determining working capital requirements and effectively managing the accounts receivables and payables process are the building blocks for effective cash management; enhancing your supply chain. The key elements of the Accounts Receivable Cycle and Accounts Payable Cycle are described below:

Supplier Finance Solutions

Ecobank is the bank of first choice to a number of large corporate organizations who buy goods and services from other companies. Once the buying corporate has confi rmed that the goods/services they ordered meet agreed conditions and that payment has been scheduled, Ecobank can make available facilities to the Supplier. These will only cover specific sales agreed with the Corporate buyer. The corresponding re-payment is made directly by the Corporate buyer to Ecobank.

The performance risk of the Supplier is mitigated by the fact that each individual Supplier is deemed important to the Corporate and is consequently recommended to Ecobank, under agreed terms. A major benefit to the Supplier is the potential substitution of the Supplier’s credit risk with that of the Corporate Buyer, and an opportunity for a lower financing rate. The Supplier will also enjoy timely and efficient payments. The Buyer benefits from a reliable supply source with supported supply chain finance from Ecobank and may extend days payables period for its own benefi t to Suppliers.

Distributor (Dealer) Finance Solutions

This covers distributors in select industries including Pharmaceuticals, Detergents and Personal Care products, Food and Beverage, Petroleum products, Telecomms, etc.

Utilization is via direct payment to the manufacturers or service providers (usually the large Corporate clients) to finance purchase of their products by their distributors while repayment is from daily/periodic lodgment of sales proceeds in the distributors’ accounts. The Corporate Seller will provide the required Sales Invoice and documentation to Ecobank for the process. The risk is lower than traditional finance facilities because of the strong supply chain links between the Corporate Seller and the distributors and the ability to spread the risk over a diversified pool of proven distributors/dealers.

The Corporate Seller benefits from faster conversion of its receivables to cash; and may benefit from a de-Risking of balance sheet when financing of its distributor is done without/ partial recourse. The Corporate Seller benefits from the enforcement of payment discipline to Distributors/ Dealers by the Bank. Distributors benefit from a possible Interest rate benefit over existing borrowings by their association with the Corporate Seller; and an assured and steady source of finance.

In addition to Trade Loans for import and export finance, Inventory and Warehouse Financing options, other related solutions within Receivables Based Finance are available from Ecobank. Contact your Corporate Banking Products Manager and/or your Account Manager today