The Gulf Cooperation Council (GCC) region is enjoying a period of economic growth and diversification, bolstered by rapid technological developments. In this roundtable discussion, hosted in partnership with United Arab Bank (UAB) at GTR Mena in Dubai, representatives from the banking, insurance and corporate sectors discuss how supply chains and procurement are changing, how that is affecting demand for financing, and how efforts to digitalise services are opening opportunities across the market.
Roundtable participants:
- Ehsaan Ahmed, executive vice-president and head of transaction banking, Rakbank
- Maninder Bhandari, director, Derby Group (moderator)
- Motasim Iqbal, managing director, regional head transaction banking sales, Africa Middle East, Standard Chartered
- Vikas Jha, senior executive officer, MeCred
- Niraj Kumar, head of global transaction banking, United Arab Bank
- Sridhar Ramaswamy, director, structured trade finance, Middle East and Africa, ADM
- Ayman Rayess, commercial director, Allianz Trade in the Middle East
- Amit Samdaria, CFO, Apparel Group
- Dilip K Shadvani, director treasury, Al Habtoor Motors
Bhandari: Looking at supply chains in this region, what factors are currently driving the maximum change?
Samdaria: We have seen significant changes over the past few years in the supply chain domain. One of the main things is the digitisation of processes in trade, with the involvement of artificial intelligence and other innovations. We are doubling our warehouse capacity and moving towards robotics, and have built a data science team to do predictive analysis on inventory and demand forecasting. That will impact the overall supply side as well.
Another is geopolitical developments. If we look at the GCC, governments are more focused on reducing reliance on the oil-based economy and shifting to other revenue streams. For example, in Saudi Arabia, they have Expo 2030 and the 2034 World Cup coming up, which will boost overall infrastructure and the development of the Saudi economy across industry, retail, hospitality and so on. These are mega projects which will transform the GCC market, and that will impact the overall supply chain.
Shadvani: The economic development in the Mena region is robust. Last year we saw growth overall of about 2.1%, and this year it is forecast at 3.6%. This is a really good story from an economic development point of view. The retail business has been one of the main contributors to this, and this indicates that the supply chain business is also likely to experience growth.
The supply chain is also expected to become more robust due to the significant investment in infrastructure. Consider the number of new ports and airports being developed in Saudi Arabia and the UAE – and if you include Egypt as well – there is a clear path for growth.
Regarding oil, there was a time when oil-producing countries were cutting production. That is no longer the case – production is now increasing. In Saudi Arabia, output was previously around 9.76 million barrels per day, and it is now expected to rise to 10.76 million barrels per day.
Looking at non-oil growth, diversification presents a significant opportunity across the supply chain. Another key area is e-commerce – Amazon has nearly doubled the capacity of its cloud business in the region, highlighting the scale of the opportunity.
Bhandari: How have these changes affected procurement?
Shadvani: Focusing on the automotive sector, we primarily import vehicles from Japan, China, the UK and France. During the Covid-19 pandemic, we faced major challenges: ships were either unavailable or prohibitively expensive. This was followed by geopolitical issues in Egypt, which further increased the cost of trade.
Amid these difficulties, Singapore emerged as a key hub for automotive trade. Currently, most ships from Japan and China are routed through Singapore before arriving in the UAE, Oman and other GCC countries.
There are three major factors driving this shift: first, time; second, the availability of real-time information about ship locations; and third, the cost from a supply chain perspective.
Samdaria: Most of the brands we source from, which are in the franchise business, have their factories in China. During Covid, because of the lockdowns in China, all the major brands suffered a lot. So at the global level, the bigger brands, they don’t want to have a China-plus-one strategy. Many of them want to move away from China in terms of production, to India, Vietnam or other places for different things, and it’s not easy to do that overnight. Most of the brands are working on this now.
For us, we used to have different suppliers across markets like China, India, Bangladesh, Vietnam, Thailand, and whenever we wanted, we could change the sourcing based on pricing and availability. That was easier to do when everything was coming to the UAE and being distributed from here. Now that we have a decent presence in Qatar or Saudi, we have opened big warehouses there so can do direct shipments and can manage the time to market more easily.
Bhandari: Coming to the availability of supply chain and working capital finance, has that changed drastically as well?
Iqbal: Across receivables, inventory and payables, we’re seeing a big pickup in terms of demand.
On the inventory side, as Amit mentions, it was previously just-in-time. You would get something shipped across from China to here in a couple of days. During Covid, so many ships were stuck for such a long time outside the ports in Shanghai and elsewhere, and we realised the whole concept of just-in-time moved to just-in-case. One immediate impact of that has been our clients’ inventory holding periods have gone up. They need to hold more stock for longer, and that means we have to look at a longer working capital cycle and extend more financing.
Another point is that if you look at the whole supply chain, our customers are saying that their customers need extended payment terms too. Historically, this market has always been around bilateral financing, where I as a banker would go to a client and offer a short-term loan or a regular import invoice finance programme on their balance sheet. There was very limited conversation around how to mitigate risk around liquidity, for example by monetising receivables. Now what’s happening is a transition from that bilateral financing model to ecosystem-led finance. We’re having conversations with clients around what their customers are asking for.
Also, historically, banks have been looking at their customers and asking who their big buyers are. Then, they would give a receivables discounting facility against those four or five top buyers. They weren’t worried about all the other smaller buyers. But what our customers are saying now is they’re selling to a much bigger group of customers, and it’s not only the top few they want to discount on.
Then there is flexibility. Sometimes suppliers are saying they don’t want to be paid on 90 or 120 days, but on day zero, as soon as they ship. However, they want some flexibility, so they have that option but don’t necessarily use it. In the past, our programmes were automatic – once you had signed up, you would definitely receive the financing. Now they’re asking for selective financing.
Niraj: Generally speaking, the availability of working capital finance and particularly supply chain finance has improved in the larger Mena region. The main reasons have been the increasing number of banks, especially the large ones, entering into the area of supply chain finance. We also see an influx of non-bank financial companies and fintechs in the domain adding to availability.
Bhandari: Have the structures of those programmes changed as well?
Iqbal: Yes, absolutely. One thing we’re seeing is integration of requests from our customers. They might have a supply chain finance programme and ask to add an ESG element to it, for example.
Then on the receivables side, we are seeing the introduction of negotiated investments as well. The bank is still taking the risk and getting the insurance cover, but the customer might be happy to get a promissory note issued from the buyer, which is strengthening the structure a bit more. Let’s be honest, from a banker’s point of view, I’m more comfortable doing payables finance than receivables finance. As it becomes more broad-based and drives financial inclusion, compared to when it was just targeting the top few buyers, the structures are being looked at in terms of strength, and it’s evolving a lot.
Bhandari: Has Islamic financing increased substantially from where it was pre-Covid, and if so, what is driving that?
Ahmed: On the Islamic trade financing side, some of the basic principles rely on having sight of the underlying assets and goods. That is a feature of Islamic structures, which is preferable when you’re looking from a risk perspective.
The challenge has been that the driver for working capital or supply chain finance is not whether it’s a shariah structure or a conventional structure. It’s financing at the best rate, in the most efficient manner, and the bank’s appetite to take a risk on you. That means it is contingent on the providers of shariah financing to figure out structures that are efficient and would work in practice, and that creates an added element around educating corporates on how those structures will work.
To a large extent, that education has happened in this region, and overall Islamic financing numbers are growing: that’s the bottom line. Of course, it’s still small compared to the overall trade finance business, but there are initiatives to address some of these challenges.
Take Malaysia, where the central bank has a shariah authority and all banks need to go through that. That wasn’t historically the case in the UAE, but now, a higher shariah authority has been created at the central bank to govern all the shariah boards of the banks doing Islamic finance. They have to align with those standards, and there is a lot of audit and focus around ensuring structures are consistent and have been pre-approved by the higher authority before they are taken to market. Over a period of time, consistency will come.
Iqbal: We provide Islamic banking products across multiple markets in the region, and typically if the commercials are better, the client will go for it. In Saudi Arabia, it is typically the only option they want, so for all the products we are launching in Saudi Arabia, we have to ensure everything, including supply chain finance, is an Islamic solution. Even if the anchor or buyer is not looking for an Islamic solution, we have situations where their suppliers are requesting Islamic solutions. There is also the regulatory side, for example in Pakistan: they are changing the whole system, so in the next couple of years everything will have to be Islamic.
Rayess: The point about educating the market resonates deeply with us as insurers. In one instance, it took a full year of back-and-forth – dialogue, trust-building, knowledge-sharing – between us and a bank to finally shape a product that didn’t exist before. ‘Education’ isn’t just a buzzword; it’s the engine behind innovation. Often, these solutions are born in more mature markets and adapted for the big banks. But what’s exciting is when the flow reverses – when we take that hard-won expertise and bring it into emerging markets.
Bhandari: What more is needed to keep adoption growing? Is there a place for supply chain finance platform providers in the Islamic banking space?
Ahmed: In terms of the ability of platform providers to support this ecosystem, I think that is still evolving. The requirements you typically see from the conventional platform providers, they understand all the bells and whistles when it comes down to open account or documentary trade, but when that has to be adapted for shariah structures there has been a challenge. It’s not always available off the shelf, because the shariah structures tend to be different based on interpretations by shariah boards. Some structures are vanilla, others are more customised, and workflows or documentation may change. I do think this is getting better, as there are more Islamic banks and this window is widening, but it remains a challenge.
Also, I don’t think applying trade credit insurance in a shariah-compliant way has evolved to the extent it should have. I’ve been involved in some structures where we have done it well, and this will be an area of growth, but more widely in the market those kinds of structures are few and far between.
Shadvani: From what I’ve seen, Islamic banking has a huge scope and is still not able to cater to the market. Why is that? First, there are very few banks in the region. There are a few in the UAE and Saudi Arabia, and also Malaysia, but they are not able to catch up with the level of conventional banking. I think that’s because conventional banking products are very simple; the colour of money is the same. With Islamic banking, first of all each bank has its own shariah board and is trying to figure out this product. The documentation part is difficult as well. However, the GCC is pushing forward in terms of Islamic banking, and the scope there is huge.
Bhandari: What are you seeing in terms of technological innovation? Is blockchain still being talked about as a method of delivery for supply chain finance, and if not, why not?
Niraj: Personally, I am a big proponent of blockchain technology. I would love to have a supply chain platform that works on blockchain because of the element of trust it brings. Having said that, I do not see mainstream vendors readily offering such a solution.
However, on the wider technology point, a strategic objective of the bank is to launch its own supply chain finance platform. I regularly meet with fintech vendors who have excellent systems. I’m really appreciative of how far fintechs have come, and feel that it’s not the time to compete with them but to collaborate. The solutions and the technology they bring to the table are fantastic, and on top of that, they have specialist skills or tools in other areas, like distribution. They are present on the ground, they speak to the anchor buyers, they bring in deals, and this can help banks a lot. It’s all complementary.
Ahmed: Blockchain hasn’t really happened, but there could be initiatives where it is contingent on the regulator to step in and accelerate the process.
Look at Haifin in the UAE, which is a repository of invoices to avoid duplicate financing. Lots of banks are participating because people have been convinced over the last two years that it’s a great concept – but it’s not all the banks. This is a blockchain solution that is working, substantial volumes are being processed and the use case has been proven, so maybe it’s time for the regulator to step in and make it mandatory for all the banks. It will only help the industry, and this has happened in other markets, such as Turkey.
Jha: Blockchain is interesting and the technology is proven. Sometimes there is a feeling that this came in ahead of its time, where the necessary tools, policies, regulation and commercial benefits were not fully defined or available. There have been a few proofs-of-concept and a real effort to make it work, but the bigger issue was having to convince so many actors in the chain. If the right actors are not there on the chain, the chain doesn’t work, and it’s a huge effort to bring multiple organisations and individual preferences together. Another issue was the cost at which this gets delivered. If the cost is high or prohibitive for a smaller organisation or stakeholder, it will not make sense and they may not participate.
On the technology point, one of the most important and interesting aspects is around data and how we use it to simplify processes. Given a choice, we would want to have everything just-in-time, but we need to have rich, reliable and verifiable data to make that call. Trade and supply chain is complex, with many actors coming together to complete a transaction. There are suppliers around the world, as well as buyers, logistics providers, counterparties, financiers, regulators. The challenge has always been to assimilate data from different sources, verify it and analyse it. Another important point is around cost, which could be a deterrent or an enabler.
With AI, we believe things are different and have the potential to have meaningful impact. The environment is conducive for adoption with digitisation being a necessity for organisations – the transition from paper to data is not forced by a technology, but by business needs. Governments are introducing enabling regulations and public goods, like open banking regulations and toolkits to make both public and private data available, which are often accessible on an open-source API with a consent layer. Generative AI is really a game-changer, with advancements in technology. The human element is being augmented by data analytics over large data sets to help make informed decisions.
When a company has access to data from its suppliers and buyers on a real-time basis, it can make important calls more quickly, and the cost of credit should come down. For example, in the insurance industry, an insurer will be more comfortable making a call on an industry where there is a lot of data than one where that’s not the case. That’s where AI models will really help.
On whether regulators are necessary for bringing better adoption of technology, I see that as essential. Regulators have repositories of various data points and the policy tools to enable organisations to adopt technology. Unless they also join the effort, progress is likely to be piecemeal, and we won’t see the complete use case of a technology solution that is available.
Bhandari: Sticking with technology, how significant is the move towards open banking?
Niraj: Open banking will be a game-changer. If there is a central repository of data which can be accessed by fintechs or banks, I can imagine a situation where I can populate hundreds and hundreds of suppliers’ bank account information into my system, without any errors, completely automatically. Analysis of banking account data that is made available to me could also help in terms of credit decisions. If all of that were to happen on a consent-based mechanism, without any effort on the side of the customer, it would change the game entirely.
Ramaswamy: We would all probably agree that we are working in silos, whether it’s the corporates, the banks or the regulatory channels. One problem with that is around risk mitigation.
We are in a market where globally, things are changing every day. One day you might have an issue in Egypt, the next in Pakistan, and you need to think about how this can be resolved. These data points are showing us the risks, and we need to mitigate them to ensure supply chain finance keeps happening, rather than just pulling out supply chains because there are risk triggers in some of these countries.
How can a bank mitigate the risk of cargo not being discharged at the right time? One way to mitigate risk is going to the insurance market, or you can go to the development banks and multilaterals, which are keen to do business with those specific emerging markets.
Let’s assume we have this kind of data available. Banks and corporates would be able to look at that, and if an issue comes up with convertibility in Egypt for example, they can look at how to address that. We need to bring the regulators, the fintech companies and everyone else onto the same path, and have that data collected so we can have an efficient supply chain.
Bhandari: One of the recurring themes in this discussion has been risk mitigation. For supply chain finance, where does trade credit insurance fit in?
Iqbal: That’s where the insurance-backed structures come into play. On the receivables side, we are seeing customers coming to us to ask for help with liquidity monetisation and risk mitigation, to create more capacity to do more on the customer side, and that is typically possible if we can provide an overall situation supported by credit insurance, and in some cases export credit agencies as well.
Rayess: We navigate different segments of clients – SMEs, multinationals, global banks, local institutions and fintechs. But regardless of the name on the door, one message remains constant: we’re not here to replace your risk framework – we’re here to strengthen it. Trade credit insurance isn’t a shortcut. It’s a deepening of your existing tools, a way to sharpen decisions and empower financial institutions to take on more calculated risk.
The challenge comes when that understanding is missing: when a client leans too heavily on the insurer without doing the basic groundwork. That’s when we hesitate. Because risk sharing only works when it’s truly shared. That’s why we’re pushing harder now to educate, to shift that mindset.
Our value comes not just from the cover we provide, but from the intelligence we build together. But for that intelligence to be meaningful, it requires a system that’s willing to open up – willing to exchange data, to collaborate. This is where real transformation starts: with transparency, with dialogue, with a willingness to learn from one another. The more connected the ecosystem, the braver the decisions. And that ripple effect? It strengthens the entire supply chain, from insight to impact.
Bhandari: To close, what do you think is the core message around supply chain finance in this region today?
Ahmed: The future is bright, and there is hope, especially when the regulators are supportive.
Shadvani: The collaboration between fintech and the core banking industry – along with advancements in digitalisation and technology – will drive the growth of supply chain finance and enable it to serve a wider range of businesses.
Iqbal: Payables finance is actually probably the most digitised trade finance product. In the UAE for example, the initial stage of enrolling a supplier, using digital technologies, takes around three to four days maximum. After that it’s all digital. That’s a great thing, and it’s leading to financial inclusion, sustainability in supply chains, and most importantly, clients reducing their costs.
Rayess: Trade credit insurance isn’t just a safety net against loss or unpaid invoices; it’s a catalyst. It’s what transforms hesitation into opportunity. For suppliers, it’s the key that unlocks access to financing. For financial institutions, it’s the assurance they need to lend with conviction. Beneath the surface, it’s about trust: trust that fuels transactions, that moves goods, that keeps the gears of global trade turning. In the end, it’s not just about shielding businesses from risk. It’s about empowering the entire supply chain to move forward with confidence, together.
Ramaswamy: We need a common understanding, similar to the ICC, and then have those rules set. Once we have that, each one of us has our own individual roles to play as corporates and banks. Where the doubt comes in is because rules are not common globally.
Niraj: One area that will make this space interesting in times to come is the disclosure norms. One of the biggest selling points that we as bankers use for payables financing is the off-balance sheet treatment, and that creates the issue of a potential investor not really knowing how much a corporate is exposed to bank lending. This will make it interesting in times to come, and disclosure is better for everybody in the ecosystem.
Jha: From my perspective, the core message is technology as an enabler. We have a lot of use cases, and what we need now is for the regulator, the financier and the corporate to collaborate and take the lead to make sure end-to-end digital trade is a reality, and it helps in the desired goal of facilitating financial inclusion for SMEs.
Samdaria: Supply chain finance has already evolved and will continue to evolve with the use of technology, because once the corporates see how much value there is, they will adopt it more widely.
Bhandari: Thank you all for your insightful thoughts. Supply chain finance in Mena has evolved and has many additional possibilities, as indicated by you all. Changes have occurred not only in procurement, after the learning experiences during Covid, but also significantly in the methods of financing. The region remains ahead of the curve.
