TradeFlow Capital Management (TradeFlow), has entered into a partnership with #dltledgers promising to reduce the liquidity shortage for small and medium enterprises (SMEs) trading bulk commodities around the globe. Estimated by the Asian Development Bank in 2019 to be US$ 1.5 Tn, this trade gap has worsened since the COVID-19 pandemic, and is projected to increase to US$3.4 Tn. International Labour Organisation studies indicate SMEs provide more than two-thirds of all jobs worldwide and account for the majority of new job creation. Enabling trade for SMEs may help alleviate the hardships caused by the pandemic.
This partnership leverages on the strengths of both companies to enable trade that traditional trade finance lending cannot effectively support. TradeFlow will look to leverage the distributed ledger technology of #dltledgers. This enables firms to capture, authenticate, and share data and documents linked to physical commodity cargoes, and supports the speedy and accurate validation, reconciliation and matching of the information exchanged between trading parties.
TradeFlow which has been employing digitisation approaches in its business for scalability since 2018, utilises its proprietary Digital Transaction and Risk Transformation Engine (DTRTE) to enable global physical commodity trade for SMEs, leveraging on its innovative non-credit, non-lending investment model. TradeFlow’s DTRTE architecture provides the added advantage of superior risk-adjusted returns and capital preservation for investors and is highly complementary to traditional trade finance lending institutions like banks.
Through this partnership of two leading industry innovators, TradeFlow and #dltledgers will enhance proven capabilities to support SME trade at scale. #dltledgers will expand its reach among SMEs, and bring existing subscribers a non-credit trade enabling solution, which is an alternative to trade credit or financing. As a result of the collaboration, SMEs can expect to benefit from shorter turnaround times, less effort spent on repetitive and manual processes, and fewer rejected trade finance applications.
Farooq Siddiqi, CEO of #dltledgers said, “At a time when many trade finance providers are retreating, we are delighted to advance through this partnership with TradeFlow to help create more optionality for traders globally. This is good news for the 400+ SMEs on our platform. We’re excited to align ourselves with industry leading firms like TradeFlow for urgently needed, innovative approaches to enabling trade among SMEs.”
Tom James, CEO of TradeFlow said, “TradeFlow and #dltledgers are aligned in that both our firms strive to innovate and bring digitised solutions to the international trading community that add value in operational and capital efficiency. “ John Collis, CRO of TradeFlow commented, “Cooperating with #dltledgers and entering into this partnership will further TradeFlow’s mission in enabling SME trade worldwide.“
Oswald Kuyler, Managing Director of the ICC’s Digital Standards Initiative, said: “As countries around the world grapple with vaccines and ongoing fallout from the crisis, a dependable supply chain is more critical than ever. We’re delighted to see companies like TradeFlow and #dltledgers working together to create better trade and more functional supply chains, especially among SMEs, which in many cases have been the worst affected. This unique partnership will enable SMEs both to move beyond paper and to complete trades that may otherwise have been starved of capital. It’s great to see businesses chipping away at the trade finance gap, and another example of innovation in Singapore.”