NR Capital, a newly-established fund that offers commodity trade finance products via a digital platform, is to use Bolero technology to power part of its offering.
The Singapore-headquartered company – which is set to announce its maiden transactions imminently – offers funding solutions to SMEs in the bulk physical commodity space.
It has implemented Bolero’s multi-bank trade finance solution to help digitise the process. This makes it the first fund to utilise Bolero’s electronic bill of lading (EBL) platform.
“This is a key part of our digital strategy – we’re using Bolero at the back end to drive all our EBLs and part of our core functionality around electronic processing of documentation as well. Bolero has been around for a long time, but I think it’s the first time a fund has plugged into it to use its core registry of title solution,” NR Capital’s CEO, Tom James, tells GTR.
The company has built a solution which allows investors to access trade finance transactions. It is targeting deals in the range of US$1mn to US$15mn in the bulk commodity market, an area which James says is chronically underserved.
Rather than competing with banks, however, NR Capital provides balance sheet funding for banks which have been forced to restrict their own funding to certain pockets of the market, largely due to capital ratio requirements.
The company takes outright ownership of the underlying commodity being sold, assessing the risk on an operational basis, rather than the company’s track record.
“We focus much more on the management of the company and their operational skills, knowledge and experience in the commodity. That’s why the security is the cargo or product in storage,” James says.
The company took its platform live in January 2018, after two years of research and testing. It has established banking relationships with institutions in Europe and Singapore.
For Bolero, it marks a first partnership with a trade finance fund, but also a fintech company – something which the company has been exploring more in recent months and years.
Perhaps most notably, Bolero partnered with the distributed ledger technology (DLT) company R3, signing an agreement in October 2017 to integrate its EBL technology with R3’s Corda blockchain platform. It’s understood that Bolero is working closely with R3 and banks on test transactions, with live deals in the pipeline.
“Bolero has historically had great success in partnering with other fintech companies and this will continue as our solutions continue to be integrated into the evolving trade finance solution ecosystem,” Ross Wilkinson, head of global accounts for Bolero, tells GTR.