aanukaa blog

The Future of Trade Financing..

I have been involved with trade financing since late 80’s when I just started my career. But what surprises me is how little has changed over the past two decades in the receivables financing space.

My very first job was a Sales and Application Engineer at a UK-based hydraulics pump manufacturer in Bangalore. Practically every single time a truck with shipments to a large OEM customer left the shipping dock, I remember the sight of our VP of Finance negotiating with the neighborhood Canara Bank on what best we could do for advance payment on invoice against those shipments. It was more of a relationship and less of math that our VP of Finance leveraged to get our invoices financed. There was of course that Kodak moment; the “Oh, no” look on the face of our VP of Finance when our Bank’s branch manager got transferred and we had to start all over again with the new guy. It used to take literally weeks before a new rapport was built; and during this time none of our invoices got financed.

Fast forward to 2007! A lot has changed since: at my previous employer, we delivered our solution as a SaaS offering, billed our customers electronically, maintained global infrastructure with very high availability… but as for receivables financing it was still relationship banking, manual copies of invoices, and related purchase orders, negotiating pretty much with a single financial institution… reminded me of my days at the UK-based pump manufacturer in Bangalore. And that’s what leads me to believe there we don’t have to wait another couple of decades to improve the trade receivables financing process. The time is now. The future of trade financing is here!

Srini