Star Tech: Tradewind Finance bridges funding gap for SMEs in the MENA region

*Published in Khaleej Times, by Joydeep Sengupta | View original article on Khaleej Times

Tradewind Finance, which set up its base in Dubai in May 2015, is concentrating on developing customised finance solutions for small and medium enterprises (SMEs) in the Middle East and North Africa (MENA) region.

The start-up holds a Category-2 licence from the Dubai Financial Services Authority (DFSA) that allows it to extend credit and provide advice on financial solutions.

Peter Maerevoet, who is based in Dubai, is the global chief financial officer (CFO) and the regional chief executive officer (CEO) for Asia at Tradewind Finance — an international factoring and supply chain finance company that has offices in 20 countries.

Earlier, Maerevoet had worked for Procter & Gamble in Belgium and the Netherlands where he held various finance functions and joined Tradewind Finance in 2016.

He weighed in on the finance industry’s outlook. “The finance industry by and large is very competitive. There are a number of industry players offering similar services in each segment. While Tradewind Finance is up against regional and international market competition when it comes to delivering factoring services, we distinguish ourselves from other similar industry players by offering factoring services for both domestic and foreign enterprises, as opposed to other businesses that only offer this service for domestic operations. Our added advantages of cross-border finance, collections, and credit protection offer clients a complete package for their demands in international trade,” he said.

The start-up provides trade finance, which includes products like supply chain financing and export factoring. It also provides credit protection and services for collections that help firms to engage in international trade.

Tradewind Finance began operations in Germany in 2000, where it also has its headquarters.

Maerevoet explained how the start-up helps SMEs in the region. “Since banks provide 5 per cent of the credit to SMEs, Tradewind Finance, an alternative non-banking financing source, fills the lack of funding gap in the region. Usually, banks enforce strict requirements such as heavy collaterals and extremely time-consuming documents that prospects must meet to be eligible for a timely loan.

For SMEs, Tradewind relieves this pressure. It evaluates the buyer’s creditworthiness, which is advantageous for SMEs with insufficient financials and few assets. SMEs make up 95 per cent of all businesses in the UAE, according to recent research published by an agency of the Department of Economic Development, which is under the Dubai Government. As a result, SMEs employ 42 per cent of the workforce and are essential to Dubai’s economy.

However, a Peal Initiative survey revealed that 39 per cent of SMEs listed lack of finance as one of their top concerns. SMEs are frequently seen by banks as somewhat risky when it comes to lending because they cannot offer any useful collateral or a strong financial company history,” Maerevoet said.

He cited that Tradewind Finance presents a workable solution that will help resolve this issue without making a dent.

Trade finance is a set of financial instruments used to improve cash flow for sellers and buyers who do business internationally under various payment conditions.

One of the goals of trade finance is to ensure smooth trade for the sellers and buyers involved. Trade finance is not a loan – it is based on a company’s receivables and payables in many cases. This means that a company does not have to pay back the lender as in the case of a loan. Firms that offer trade finance serve as the intermediary between buyer and seller. In one trade finance scenario, the trade finance firm purchases a company’s receivables and advances them the majority of the invoice amount.

Maerevoet said, “We advance up to 95 per cent of the invoice amount. At a later date, we collect payment from the buyer and extend the remaining balance to the client.”

The UAE boasts one of the most diverse and thriving economies in the world, and during the past few years, it has risen to the top of several lists of global economies. SMEs are the backbone of many economies, including Dubai and the UAE. By employing a large percentage of people — around 42 per cent in Dubai — SMEs improve people’s financial conditions.

Tradewind Finance helps businesses focus on and invest in research and development (R&D), grow their operations, develop new goods, and other activities because of the improved cash flow.

The start-up offers timely guidance on navigating the world’s choppy financial waters. Tradewind’s cross-border financing packages and international capabilities equip businesses for entering new markets and make these ventures more secure through things like credit protection, overseas collections services, and on-the-ground support from our local teams around the world.

Flexibility is at the core of Tradewind’s services, according to Maerevoet. For instance, when deciding to fund a business, Tradewind looks at the creditworthiness of their buyers who may have stronger financials.

TANGIBLE GAINS

Tradewind accelerates cash flow and maximises growth by offering flexible payment terms. By financing their accounts receivable with the added security that comes with international trade credit insurance, Tradewind also delivers significant credit protection to SMEs.

NON-BANKING TRADE FINANCE TRENDS

One of the most prevalent non-banking finance trends is lenders’ digitising their businesses. Today, there is a greater focus on transparency and traceability. Lenders are upgrading their software so customers can track the flow of their money in real time.

Companies can trade with confidence by having fast access to information on payment transfers. Companies are able to safely decide on purchases and orders by utilising the information that is easily accessible to them.

According to recent data, the Middle East received more than $1 (Dh3.67) billion in investments in 2020 alone, with 35 per cent of those start-ups having their headquarters in the UAE.

Data shows that it’s vital for SMEs to have a strong financial plan in place that enables them to concentrate on growth and development rather than worrying about money.

About Tradewind Finance

Founded in 2000, Tradewind Finance maintains a network of offices all over the world, including Bangladesh, Brazil, Bulgaria, China, Hong Kong SAR, Hungary, India, Pakistan, Peru, Turkey, UAE, and the USA as well as the headquarters in Germany. Combining financing, credit protection, and collections into a single suite of trade finance products, Tradewind brings streamlined, flexible, and best-in-class services to the world’s exporters and importers.

Latest Articles

Here’s what we’ve been up to recently.

出口信用保险融资是什么?包括哪些方面?

出口信用保险融资:是一种基于出口信用保险的融资方式,旨在帮助出口商改善现金流。出口信用保险主要用于为出口商提供保障,覆盖因买方的商业或政治风险(如破产、无力偿付债务、战争等)导致的未付款风险。在此基础上,出口信用保险融资通过将保单项下的权益转让给银行或金融机构,使出口商能够向后者申请融资,从而实现资金融通,优化现金流。 具体而言,出口信用保险融资包含以下几个关键点: 1、风险保障:出口信用保险为出口商提供了风险保障,保障了货款的安全性。 2、应收账款质押融资:通过信用保险保障,出口商可以将已购买出口保险的应收账款质押给银行或金融机构,从而获得一定比例的融资。 3、提高现金流:出口信用保险融资可以使出口商在海外买家付款之前,即获得部分或全部货款,从而增强企业的流动资金。 4、提高市场竞争力:出口商在提供信用销售时,可以通过出口信用保险降低回款风险,增强其与国际客户的合作信心,同时银行和金融机构也因保险的保障而乐于提供融资支持。 总之,出口信用保险融资可以有效降低出口商的风险,优化资金周转,为企业提供更灵活的融资手段,提高国际市场竞争力。 关于出口信用保险融资和其他国际贸易融资方式,有以下几方面需要注意: 1、出口信用保险:出口信用保险是一种专门针对出口商的保险,为出口商提供应收账款收汇风险保障。在国外买家无法支付货款时的损失风险。它可以覆盖因为政治风险(如战争)和商业风险(如买方破产或无力偿还债务)导致的损失。出口信用保险增强了出口商的风险保障,使其更具竞争力。 2、出口信用保险下的应收账款融资:出口商在获得出口信用保险后,可以将保单项下的应收账款权益和保险权益作为抵押,向银行或其他金融机构申请融资。这种方式使出口商可以提前获得货款,从而提高现金流,减少资金压力。 3、打包贷款:打包贷款是指银行在出口商签订出口合同后,将出口商收到的信用证下的预期收汇款项作为还款来源,向出口商提供的短期融资。此类贷款帮助出口商解决在生产、采购等备货过程中的资金需求。 4、保理业务:出口商可以将应收账款转让给国际保理公司,通过保理公司进行融资。国际保理公司将保障应收账款的安全性,同时向出口商提供资金融通。