Local presence key as SCF enters complex countries

Luca Mattia Gelsomino

date: November 29, 2019

SCF can provide essential finance for supporting the growth of companies in “complex countries”, argue panellists at SCF Forum Europe.

Chantal Joosse, business development director, strategic partnerships – Stenn International, Steven van der Hooft, CEO – Capital Chains, Avarina Miller, director, working capital solutions – Demica and Alejandra Alcalde, head of SCF global sales, BBVA all agreed that while entering developing markets or complex countries can be challenging, there are some exciting opportunities in Asia, Latin America and Africa.

Demica has developed its FCIreverse – in collaboration with FCI– which Miller described as “super-supplier friendly” with a funding programme aligned with the geographic supply chain. It aims to allow for the smoother on-boarding of suppliers by allowing FCI members in different countries to upload suppliers on behalf on their fellow members. This solution tackles some of the KYC issues or even language issues that make expanding SCF programmes into new more complex regions challenging.

Joose reflected on challenges in expanding into Asia, highlighting the US-China trade war, economic uncertainty and diversification of the global supply chain.

Trust needs to be built with suppliers but economies such as Vietnam, Thailand and Singapore are emerging and stepping up and becoming “hot.” There is a lack of financing opportunities in these markets, she argued, which has allowed Stenn to find its “sweet spot”.

Local currency and finance were identified as issues by van der Hooft, who discussed his experience of payables finance in the African market.

He noted how overseas suppliers supplying products to African companies are usually large and medium-sized companies with access to competitively priced funding in their home countries.

International banks’ strengths are in foreign currency financing, but he highlighted the fact that you need local resources and “you need feet on the ground.”

Alcalde agreed and emphasised the importance of having strong support and expertise in the local area.

BBVA’s supply chain finance solutions have focused on Latin America expansion. They can offer to fund customers’ suppliers in a wide range of currencies.

Having an attractive programme for suppliers coupled with local branch support was considered the most important factors to success.

Luca Mattia Gelsomino

Assistant Professor at University of Groningen.

Luca Gelsomino is an Assistant Professor at the University of Groningen and the Academic Director of the SCF Community. In this role, he oversees the Community’s research projects, international network and publication strategy. His teaching interests include supply chain management, financial analysis and Supply Chain Finance. He holds a Ph.D. with merit from the School of Management of Politecnico di Milano (Italy), on the topic of measuring the financial performance of supply chains. While working for the School of Management, he directed the School’s permanent research program on Supply Chain Finance. His research focuses on the relationship between physical and financial supply chains.