Equity Bank's new trade finance system to boost supply chain financing

Equity Bank has deepened its investment in technology and innovation in response to dynamic customer desires and the changing business environment to meet the emergent needs for its business clients.

Equity Bank says the new and robust trade finance system will improve turn-around time and boost supply chain financing. At its trial phase, it has seen a recorded increase in earnings through non funded income business revenue as well as registering growth in contingent liabilities for the past one year.

This new strategy will see a shift from focusing primarily on large corporate clients to including MSMEs and SMEs into the business mix. Equity Bank has enlarged its international outreach through collaborations with top global correspondent banks across the globe through this move. This will enable the bank to handle more trade finance transactions for large international commodity traders, global construction giants, blue chip corporate manufactures and MSMEs and SMEs.

The technology has enabled the digitization of services, real-time exchange of data and assets, faster processing and more efficient verification of compliance with customs and international trade regulations as well as improved transparency and tracking of trade assets.

SMEs and MSMEs are set to benefit from a wide range of solutions which includes the issuance of collateral-free, bid bonds, performance guarantees, advance payment guarantees, letters of credit, invoice discounting, and Local purchase order (LPO) which forms the core of Equity’s key offering. These collateral-free services are readily available at any Equity branch in the country enabling MSMEs and SMEs to compete effectively against well-established businesses that previously dominated tendering processes within the country.

Small and medium-sized enterprises remain a pivotal economic growth engine for the country. As the outbreak continues to weight on the country’s growth outlook, SMEs are facing cash flow challenges like never before. In Kenya, SMEs create 30 percent of the jobs annually and contribute 34 percent to Kenya’s GDP.