Banking News

Russian trade finance blockchain Factorin processes $100 million in April

trade finance goods delivery

Russian blockchain trade finance platform Factorin recently passed 31 billion rubles ($439 million) in processed transactions, a CNews report said. 

The figure was processed within a year of Factorin’s June 2019 launch. It transacted more than $100 million in April after the COVID-19 crisis accelerated digital channels. 

“The (COVID-19) crisis creates both challenges and opportunities. Factorin, with the help of 28 banks, helps companies take advantage of these opportunities — buyers can delay payment for several weeks or months, but suppliers receive money in a couple of hours,” said Andrey Macklin, Co-founder of Factorin. 

“The main thing is that the platform gives customers the widest range of trade finance tools: factoring, dynamic discounting and more than ten ready-made solutions.”

The Asian Development Bank estimates there is a global trade finance gap of $1.5 trillion. Moscow-based Association of Factoring Companies says 96% of Russian SMEs don’t even apply for trade finance. 

Factorin uses blockchain to ease this process by removing intermediaries and manual operations, reducing the time and cost of securing trade finance. It automates the transfer of trade documents between companies, suppliers, and banks. 

The platform is currently used by Russian retail store chains Dixy and Magnit, 28 financial institutions and numerous suppliers. The company claims its solution can enable businesses to receive money in their account two hours after delivering goods. 

Factorin’s platform is built using the Ethereum blockchain. The company is backed by Digital Horizon, a Moscow-based venture capital firm, and the company is now readying for a Series A funding round. 

The company offers a subscription-based model as well as a transactional model. One of the main benefits is that the solution can be integrated with existing IT systems such as ERP, CRM, accounting, warehouse, and logistics. 

Last year, Sberbank piloted a blockchain trade finance transaction with commodities giant Trafigura. 

Russia’s Alfa-Bank is a member of the Marco Polo Network and has executed cross-border payments pilot in the past. we.tradekomgo,  Contour and dltledgers are some other high-profile initiatives in the blockchain trade finance sector.