Mercore, together with Tradeable, complete their first digital bill of exchange transaction in Africa supporting trade between Kenya and Belgium London, UK, 7 May 2024 – Mercore, the global trade-focused fintech group, in collaboration with Tradeable House Africa, today announced that it has completed a receivables purchase transaction backed by digital bills of exchange. The finance facility will support a Kenyan producer of organic pesticides growing its sales into Belgium and the wider European Union. The deal is Mercore’s first digital negotiable instrument-backed facility to execute in Africa, and there are several more in the pipeline working together with Tradeable as its strategic partner in the region.
How it works
Mercore enabled the Kenyan supplier and Belgian buyer to generate and sign the digital bills of exchange (DBE), utilising Mercore’s digital execution platform (powered by trace:original). The financing arm of the group, Mercore Capital, working together with its Africa trade facilitation partner, Tradeable House Africa, thereafter purchased the DBEs under a ‘Digital Receivables Finance Agreement’ drafted by Sullivan & Worcester UK LLP. The DBEs were executed under English law leveraging the recently enacted Electronic Trade Documents Act 2023. The underlying DBEs also included several of the International Trade & Forfaiting Association’s (ITFA) suggested clauses from the 2023 Addendum to the ITFA Digital Negotiable Initiative’s Handbook.
Why it matters
The use of digital payment instruments, such as this DBE, enables parties to execute quicker (typically same-day), at lower costs. A DBE is also a more sustainable alternative to traditional paper-based negotiable instruments which, in turn, helps to drive greater financial inclusion – something that Mercore is committed to. Additionally, with many of the typical paper-based processes having been significantly challenged in recent times (COVID, delivery delays, strikes, etc), electronic execution greatly improves operational resilience and minimises disruption.
Anthony Wadsworth-Hill, Co-founder, DCEO & COO of Mercore said:
Mercore is delighted to execute this ‘digital bill of exchange’ transaction between Kenya and Belgium, leveraging one of the UK’s best exports, ‘English law’. We relentlessly strive to improve financial inclusion for SMEs and those companies transacting with developing markets. With this facility, we are supporting both of those areas and helping to close the $2.5 trillion global trade finance gap. We look forward to continued collaboration with our industry partners and supporting existing and new customers with their trade financing requirements going forward. This is exciting progress, and it’s just the beginning. Isha Kasule, Managing Director, Tradeable House Africa said:
Tradeable is excited to be part of this transaction, which is a monumental step towards digitalization within the trade sphere in our region. Our strategic alliance with Mercore further enhances our mandate to promote ‘Trade into Africa, Trade Out of Africa, and Intra-Africa’. Tradeable is excited by the growth potential that our collaboration with Mercore shall unlock. Simon Cook, Partner at Sullivan & Worcester said:
We are delighted to support Mercore’s drive to provide sustainable financial products to the SME sector. These are exciting times for the trade finance industry and, with the recent passing of the Electronic Trade Documents Act 2023 providing an innovative and flexible approach to digital negotiable instruments, English law has once again shown it can be a leader in the global market. Sean Edwards, Chair of the International Trade & Forfaiting Association said:
This transaction by Mercore, on top of similar deals executed last year, shows them to be not only one of the boldest pioneers of digitalisation in trade finance but also demonstrates the relevance, scalability and repeatability of structures using digital negotiable instruments based on ITFA standards. We’re pleased to have paid a small part, but the plaudits go to Mercore for consistently pushing the boundaries of this new world. Chris Southworth, Secretary General of the International Chamber of Commerce (United Kingdom) said:
We really welcome this initiative from Mercore and those involved. It is more evidence of the practical benefits of trade digitalisation and particularly important to helping make trade with Africa cheaper, faster, simpler and more sustainable from which we all gain. From all of the evidence we have seen to date, there are no downsides to digitalisation for any company wanting to better manage cash and be more efficient and profitable. The opportunity is for all companies to be benefitting from this activity Sarah Green, Law Commissioner for England & Wales said:
I am delighted to see how the Electronic Trade Documents Act 2023 has already started to transform international trade by addressing the trade finance gap and enabling more efficient and environmentally friendly transactions. Mercore has been at the forefront of these innovations and has fully embraced the possibilities of the new legal landscape. This latest achievement shows just how well set they are for future developments. Patrik Zekkar, CEO of Enigio said:
Enigio are glad to join forces with Mercore’s vision to drive industry and society development. This is a great testament that the MLETR adopted ETDA has a much further reach and impact on global trade, and is not limited to UK borders. This will drive a major adoption of digital transformation impacting global trade for society and sustainability as a whole.
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About Mercore
Mercore is a non-bank financial institution committed to bridging the SME Trade Finance gap, enabling change where it’s needed the most, and facilitating global business for the greater good.
We are committed to financial inclusion, delivering solutions that ensure trade finance can reach all legitimate business opportunities in a timely manner.
We continually strive to challenge the status quo, with the progressive adoption of proven technological advancements, as evidenced by our membership of ITFA’s DNI Initiative and collaboration with Enigio.
Our technology platform has been developed by trade finance and KYC/AML professionals with a compliance-first approach to banking and finance. As a result, we have market-leading capabilities in trade execution, KYC, AML and financial crime prevention.
This enables us to undertake even those transactions which present more complex KYC/AML risk factors and require specialist knowledge, risk management and controls. For more information, please visit www.mercore.com or email us at info@mercore.com
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Contact Details
Mercore
Anthony Wadsworth-Hill
Co-founder, DCEO & COO
Tel: +44 (0)20 3105 9000
Email: anthony.wadsworth-hill@mercore.com