Cross-border finance platform Finverity has partnered with Ebury, a payments provider specialising in FX hedging, to boost supply chain finance offerings in emerging markets.

The two companies, both of which are headquartered in London, have already integrated their respective platforms via application programming interfaces (APIs). The partnership was agreed earlier this year and became operational in mid-August.

Finverity says the link-up will support investors in developed markets looking to access supply chain finance deals in emerging markets, while the involvement of Ebury will reduce risk of exposure to volatile currencies and cut costs associated with large volumes of low-value payments to suppliers.

“The partnership will also make it easier for buyers in emerging markets to launch their own supply chain finance programmes without having to worry about the robustness of their payment infrastructure or access to working capital,” the company says.

“Suppliers, on the other hand, will be able to access affordable working capital by selling their outstanding invoices in exchange for early payment in the currency of their choice, a win-all solution for all parties involved.”

Slava Oganezov, co-founder and chief executive of Finverity, tells GTR that currency risk has historically been a major deterrent to traditional providers of trade finance.

“In some cases you can get dollar transactions, which is more or less fine for most funders, but in a lot of cases you have currencies that are volatile,” he explains. “A lot of investors would rather not follow the FX trends of those sorts of currencies, so it’s important to offer hedging to take out that risk.”

Oganezov says Finverity is currently active in Africa and Eastern Europe – both of which are “highly underserviced” by supply chain finance offerings – but that the United Arab Emirates is its main focus at the moment.

Another issue for traditional supply chain finance, he adds, is that it has generally only been offered to larger buyers on one side, and large-to-mid-size suppliers on the other.

“By using our tech to automate processes, we can make sure the full product is catered towards smaller entities,” Oganezov says. “The payment mechanism plays into that as well.”

On the technical side, users of the platform are now automatically given the option to hedge out currency risk. That service is facilitated via Ebury, which is regulated as an electronic money institution by the UK’s Financial Conduct Authority.

2020 has so far proven an eventful year for the supply chain finance market. The slowdown in trade caused by the Covid-19 pandemic resulted in a sudden drop in the amount of liquidity available in the market, while demand – as Oganezov says – has “risen drastically”.