South Africa’s Standard Bank has become the first African bank to join CCRManager’s digital trade finance platform, a global project to ease trade and supply chain finance distribution.
CCRManager (CCRM), a fintech firm backed by the Monetary Authority of Singapore, launched its platform earlier in the year, as previously reported by GTR.
Thirteen banks across 11 countries are already members of the platform, transacting live deals. These include Bank of China, DBS Bank, ICICI Bank, Swiss Re Corporate Solutions, UniCredit, BBVA, Yes Bank and now Standard Bank. The remaining banks are based in Japan, Hong Kong, Middle East and UK, but have not been named.
In addition, a range of other major banks have signed a letter of intent to become a member, including ANZ, Bank of America Merrill Lynch, Bank of East Asia, BNP Paribas, HSBC, Industrial and Commercial Bank of China, MUFG, Mizuho, Standard Chartered and SMBC.
The web-based platform enables financial institutions to manage the entire process of distributing trade finance internationally to other banks, credit insurers and fund managers – a process that today is largely done manually over phone and email.
Banks will be able to buy and sell debt instruments to optimise their balance sheets for capital and credit relief and liquidity. The platform is designed to make it more efﬁcient to reach out to many potential buyers, as well as track activity in a real-time, visible and auditable way, provide pricing transparency and compare the offers received on a transaction.
It is hoped that the increase in productivity and transparency will help to attract new investors into trade finance and give banks more capacity to originate new trade finance lending.
Speaking to GTR, Vinod Madhavan, group head of trade finance at Standard Bank, says the bank will be conducting its first transaction with an Asian bank within the next couple of months.
He adds that the partnership with CCRM is a significant opportunity, not just for Standard Bank, which will now be able to appropriately sell down African trade risk to international banks and investors, but also for Africa as a whole, as it will help reduce the continent’s US$100bn trade finance gap.
“It allows us to work with other banks who are a part of CCRM,” Madhavan says. “Let’s say I have x million dollars of credit limits/lines on a Kenyan bank, and I have utilised the full limit exposure, then I cannot support the bank with more transactions. That’s one of the reasons there is an unmet trade finance demand. With CCRM I would be able sell part of existing exposure off in the market, enabling me to support the Kenyan bank do more business while retaining the same limits.”
He hopes that Standard Bank’s CCRM membership will encourage other African banks to join the network too. “I am very confident that we’ll not remain the only African bank for too long,” he says. “This is a subset of a bigger thing, which is, how does Africa open itself up for doing more trade with more people around the world? The more participants that get involved, the more it will help us achieve that outcome.”
According to CCRM chairman Tan Kah Chye, the firm’s main focus right now is to sign up more members – the first target being 30 banks and insurers. “We are very much on track to hit our critical mass target by March/April 2018,” he tells GTR.