Today, the Singapore division of Malaysian bank CIMB announced a collaboration with e-procurement platform SESAMi Holding and Capital Match to digitally finance invoices for the supplier community.
Supply chain finance is a growing need in Singapore. Local magazine Singapore Business Owners found that pending payments to SMEs amounted to S$4.15 billion ($3 billion) last year. According to a study by Xero, nine out of ten small businesses in Singapore reported their clients had defaulted on payments.
CIMB, SESAMi and Capital Match are working to solve this issue and provide SMEs with working capital by automating supply chain finance. Last year, SESAMi merged with Capital Match for its peer to peer lending and SME financing solution. SESAMi is already serving customers like Singtel, SATS, SIA and SRC. The company claims suppliers on its platform will be paid for their outstanding invoices on the platform within two business days after they are on-boarded.
“SESAMi’s integrated procure-to-pay and supply chain financing allows the suppliers to access lower cost of funds by leveraging on large corporate buyers’ good credit rating,” Said Ong Teck Soon, Chairman and Group CEO of SESAMi Holding.
“With the supply-chain financing, suppliers only need to submit minimal documents to be on-boarded under the program and this will facilitate a smooth and simple process for the suppliers,” said Sharath Singh, Commercial Director of Capital Match.
SESAMi says it transacted S$2.2 billion ($1.6 billion) worth of e-invoices through its platform in 2018. Once onto the supply chain financing platform, suppliers need to select the e-invoices it needs to get paid for. The SESAMi and Capital Match solution will be offered to CIMB clients and the bank will provide the financing.
“Once the account is set up under the e-supply chain financing program, technology enables working capital funding to be promptly transferred to our customers. We want our financing package to be attractive to provide our customers a positive experience and access to new financing options,” said Lai Ven Li, Head of Corporate Banking of CIMB Singapore.
The supply chain solution does not leverage blockchain at this time.