FCI heads into reverse factoring with FCIreverse

News | 4 July 2017

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FCI (the international representative body for factoring and financing of open account domestic and international trade receivables), announced on 27 June that its new supply chain initiative FCIreverse will be underpinned by the Demica platform. FCIreverse will help the FCI’s members – a network of more than 400 banks and factoring firms globally – fund their clients’ suppliers through reverse factoring.

By opening Demica’s multi-funder platform to FCI members on a pay-as-you go basis, FCIreverse will help remove any structural barriers to using reverse factoring. Reverse factoring (also known as approved payables finance or confirming) is a growing segment of supply chain finance, particularly in manufacturing, retail and services. According to FCI it is growing at 20% annually and accounts for more than $100bn funds in use.

In a statement, the FCI expects the model will help SME finance and open up the market beyond the larger firms. “The FCI’s pay-as-you go model with Demica will allow smaller FCI members that focus on companies with less than $1bn in revenue to be able to economically offer reverse factoring in this underserved market, substantially increasing the amount of working capital available to the world’s SMEs.”

Peter Mulroy, secretary general of FCI, and TFR editorial board member, said: “We have been planning the launch of FCIreverse for over two years. The key step was to identify a proven platform provider with a strong background and experience in buyer-led payables programs, that was able to meet our members’ technology, security & compliance policies needs but also ensured a sound user experience for the anchor buyers and their domestic and international suppliers. Demica has already been adopted by a number of global banks within the FCI network, and with its recent release of new interfaces and supplier onboarding tools it stood out as our partner of choice”.

FCIreverse pilot programmes are set to start in the third quarter of 2017.

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