Factor Finance for Procurement
Our staff saw that the local entrepreneurs, who we had helped win contracts, were often hamstrung by a lack of access to credit. Given the typically significant up-front costs of international procurement contracts, and the slow payment rate of the large buyers, the local companies are forced to compete with a disadvantage.
We came up with an idea to overcome this problem. The Factor Finance for Procurement fund (3FP) will work with local banks to provide lines of credit to vendors who have successfully won an international procurement contract. This loan guarantee facility will serve as the counterpart guarantee to locally-provided credit, factoring in the nature of the contract as a form of collateral. We will also be providing credit advisory services to all the SMEs we are currently assisting through the Sustainable Marketplace Initiatives.
The 3FP Model was named a People’s Choice Winner by President Obama and Prime Minister Harper as part of the G20 SME Finance Challenge. We will be rolling it out in two countries in 2012.
Reports and other related documents Questions? Contact Scott Gilmore
None at this time.