The Danish Export Credit Agency (EKF) is working with fintech Tradeshift, to underwrite credit lines to exporters as part of the country’s support for businesses during the pandemic. Banks will be encouraged to offer favourable credit lines to large organisations with export turnover in order to pay their suppliers earlier, and EKF will underwrite these lines of credit. The Danish initiative is targeting the top 250 large buyers in Denmark, and Tradeshift claims that up to $55bn in working capital can be made available to suppliers between June 2020 and June 2021.
‘We want to do our bit to motivate companies to pay immediately, so we’ve made our full arsenal of solutions available to export companies that choose to show their support for suppliers. Under our model companies can pay suppliers ahead of time without compromising their own liquidity,’ said EKF Director Kirstine Damkjæ
The Danish initiative relies on accessing invoicing data exchanged between buyers and sellers to build up an accurate picture of existing invoice liquidity that is eligible for finance. As the technology partner in Denmark, Tradeshift will provide that access. Businesses that rely on paper-based invoices will not be able to access the program.
“The immediate payment scheme has the potential to become a vital support package for companies during the corona crisis’ said Tradeshift’s co-founder and SVP, APAC, Mikkel Hippe Brun.
In a statement, Tradeshift said it is ‘Currently in discussions with a number of governments across the world who are considering the model as a way to make working capital available to businesses.’
© Adaugeo Media Ltd
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