Use Case
Channel Financing in Mobile Technology Sector
Enable seamless access to working capital for all partners in the system, empowering their financial capabilities.
Supercharge business growth with channel financing.
It accelerates the cash flow for businesses and offers credit flexibility to distributors, partners, and retailers.
Background
A prominent technology company, operating with a multi-tier distribution network, encountered difficulties in addressing the diverse needs of each level within their distribution channels. These encompassed retailers procuring from distributors, and distributors in turn purchasing from the anchor company. The situation was exacerbated by fierce competition for market share and limited available working capital among retailers
Furthermore, the absence of financing alternatives for the last mile retailers added to the challenges faced by the company.
Furthermore, the absence of financing alternatives for the last mile retailers added to the challenges faced by the company.
Challenge
The company sought a solution capable of addressing the intricate layers of its distribution network, involving retailers purchasing from distributors and distributors sourcing from the anchor. Intense competition for market share presented significant challenges, particularly among retailers.
Compounding the situation, there was a notable absence of viable financing options tailored to meet the unique needs of last-mile retailers in the distribution network.
Compounding the situation, there was a notable absence of viable financing options tailored to meet the unique needs of last-mile retailers in the distribution network.
Approach
The approach centred around introducing TradEasy, an exclusive program designed to transform financing within the distribution chain. It permitted the utilization of working capital support for purposes beyond inventory procurement, providing effective financial solutions for retailers and distributors. The program offered a cost-effective financing option compared to other unsecured lending solutions, enhancing its attractiveness.
Beyond financial data, assessing eligibility based on trade repayment behaviour and past transactions, ensuring comprehensive evaluation. Data-driven underwriting and a digitized onboarding process were implemented, facilitating online documentation pre and post sanction while minimizing fund diversion between tiers.
Beyond financial data, assessing eligibility based on trade repayment behaviour and past transactions, ensuring comprehensive evaluation. Data-driven underwriting and a digitized onboarding process were implemented, facilitating online documentation pre and post sanction while minimizing fund diversion between tiers.
Result
- Market share increased significantly, particularly in multiband outlets, as a result of enhanced working capital support for last-mile retailers.
- TradEasy provided a reliable funding source to navigate seasonal fluctuations and effectively manage new product launches within the distribution network.
- The marketplace approach cultivated healthy competition among financiers, leading to cost-efficient funding options.
- Digitization and data-driven processes streamlined operations, making onboarding and financing more efficient.
