SMEs are the drivers of Cross-border trade in Africa. They not only anchor the Intra-Africa trade but also trade between Africa and the rest of the World. African Exporters however endure various challenges, including:-
- A growing trend by overseas customers to insist on open account trading
- Limited access to credit insurance and risk coverage for overseas debtors thus exposing MSMEs to the risk of bankruptcy in event of default
- Poor access to working capital in Africa (or where available, the cost is quite high).
- Increasingly long credit terms imposed by overseas customers who are keen to leverage supplier finance for working capital
- Limited knowledge about overseas markets, legal systems, collection procedures, etc
Enter Mtaji Capitals, Export Finance!!
Mtaji Capital has developed an innovative Export Financing solution working with overseas partners to facilitate easy access to working Capital for African MSME exporters.
The solution brings the following key features for the first time in Africa!!
- An International Supply Chain Finance product that simplifies the Export/Import business and provides liquidity seamlessly
- Simple, fast and digital processes without the need for complex Banking correspondence arrangements
- Funding accessed by the African Exporter immediately the importer confirms the trade
- European cost of Capital
- Access to European-based risk coverage as well as benefits of debtor and market experience
- Comprehensive invoice collection, communication and service processes with buyers in their native language, time zone and culture which guarantees quick collection while maintaining the importer’s goodwill
- Win:Win!! – Added value to African Exporters as well as Overseas importers
How it Works
- Exporter shares with Mtaji Capital (MC) details of the importer(s), including the transaction value.
- MC checks the credit status of the importer(s), authenticates the transaction with the importer, and advise Exporter on the applicable limit and pricing for the respective importer(s).
- Exporter signs up onto the Ankara platform and uploads the necessary KYC documentation and executes legal documentation
- Exporter then ship goods to their overseas customers and uploads all export documentation, including Commercial Invoice(s) through the Ankara platform
- MC reviews the documentation, and establish a Credit Risk Insurance against Importer default. This cushions against the risk of importer default or insolvency.
- MC remits 80% – 90% (less funding costs) of the invoice value to Exporter.
- On Maturity of the invoice, MC collects and remits the balance of 10-20% less funding costs.
- In case of default, MC claims from Insurance and remits proceeds to Exporter
African exporters to the following Countries/regions can access our facilities:
- European Union
- United Kingdom
- United States of America (USA)