Commercial Bank of Africa (CBE), a bank that has been linked with the family of President Kenyatta has partnered with African Gurantee Fund (AGF), as well as a Kenyan based fintech company Ennovative Capital (EC) to develop an online platform to support supply chain financing for Kenyan small and medium enterprises (SME).
The platform uses what the partnership refers to as the Reverse Factoring Model, which was recently launched during an event held in Nairobi, with top banking and fintech players acknowledging the role of technology in helping increase commerce in Africa.
With the use of ‘Reverse Factoring Model’, corporate buyers will approve and submit their supplier invoices to Commercial Bank of Africa through the online platform whereby the bank will then facilitate immediate payments to suppliers with recourse to the corporate buyers. This structured financing model allows participating SMEs to incur debt only when borrowing for expansion, rather than on routine working capital.
Prior to the aim of impacting and enhancing SME operations, ‘Reverse Factoring Model’ also reduces the administrative burden placed on procurement and finance teams, who have to deal with individual suppliers on a regular basis.
