Baku, Azerbaijan, July 13
By Ilkin Shafiyev – Trend:
Azerbaijan’s PASHA Bank is integrating its digital platform with state information bases, in particular, the database of the Taxes Ministry as part of introducing a new complex of financial services linking all participants of the supply chain - buyers, suppliers and a bank (supply chain finance), Aleksandr Golovko, director of the bank’s SME Department, told Trend.
This will help to simplify entrepreneurs’ access to obtaining financing and convenient bank services, he said.
“We are actively working towards integration of our platform with state data sources, which will allow us to automatically receive a standard set of necessary information to simplify the servicing of our customers and making financing decisions,” he noted. “This is a natural situation in the markets of developed countries and some developing countries of the Eurasian region. Thus, a client won’t need to additionally visit state agencies and receive relevant documents for obtaining financing in the bank. In general, all transactions within supply chain finance will be confirmed and administered in this system, which simplifies the process of obtaining financing, reduces the risk of errors, loss of documents and simplifies the workflow.”
“In addition, the established transparency of relations with the client enables the bank to better assess the risks at the level of the entire loan portfolio, ensure rapid decision-making on financing and ease of issuing a loan,” Golovko said. “One of the options for implementing a digital document management mechanism in our system is the use of the international Electronic Data Interchange (EDI) standard.”
He added that by the end of the year, the financing process as part of supply chain finance will be transferred to the electronic format of administration as well.
“Usually, the establishment of a limit for a target supplier of supply chain finance within the accelerated decision-making procedure takes place within 3-5 days, after which the client provides an invoice or a contract for obtaining financing,” he said. “The limit is set for one year. The very format of the revision of the limit is quite simple and by the end of the year it will be conducted through a digital platform. Revision of the limit, in fact, will be a formality for the client, because the system will automatically assess the amount of work of this supplier with customers and other necessary factors of transaction analysis.”
Golovko noted that supply chain finance is the most convenient and accessible tool for representatives of small and medium-sized enterprises (SMEs) - B2B suppliers to provide financing of their current activity, starting from the stage of concluding a contract with a buyer until the stage of waiting for payment from the buyer for the product or service provided.
“The problem of access to finance is quite relevant for SMEs,” he added. “In our case, supply chain finance can become the main source of financing of SMEs, because this is a quite interesting service for customers for 3 simple reasons: this solution allows getting financing quickly and easily when compared to classic lending, it doesn’t require collateral and has a lower cost than classic lending. Considering that SME development is one of our priorities, as part of expending the scale of supply chain finance, we expect growth in this segment at 100 percent at the end of the year.”
PASHA Bank has been operating in Azerbaijan since 2007.
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