Nkiru Amadi-Emina, Founder and CEO of Pivo Africa, a financial platform for small and medium sized businesses, discusses supply chain finance in Nigeria and explains what makes Pivo different.
"We are a financial platform that offers digital banking services for small to medium sized businesses (SMEs) in the supply chain sector. Our credit and loans product is centered around supply chain finance. In terms of the trends that we are seeing, there is a push to get commercial banks, or micro finance banks, to solve the credit gap for SMEs using a supply chain finance model. That model ties the issuing of loans against an SME’s receivables outstanding, or against an SME’s receivables upcoming. Relying on the supply chain to implement that model is becoming easier because more technology is now being used in the supply chain space. Whether it is technology to place and manage orders, provide visibility, or technology that allows e-invoicing or managing accounts and payments, it makes it easier for SMEs to integrate with larger corporations via supply chain finance programs", says Nkiru Amadi-Emina.
"Traditional banks focus their supply chain finance on larger businesses and corporations, whereas Pivo’s approach is centered on SMEs. Bigger banks won’t deal with SMEs because to them, SMEs do not have a credit profile, or a transaction history that allows banks to either credit profile or risk assess their loan portfolio. Pivo can zoom out to attach credit profiling and risk assessing to the larger corporates that SMEs are working with, so decisions we make on an SME that we are financing are tied to the larger corporate with which they are doing business", she adds.