I recently had an opportunity to catch up with Chris Hale from Kountable. Kountable is doing some real trade finance, providing pre-shipment finance to resellers in Africa.
That is a high value-added function to many of the large manufacturers who know their emerging market resellers are starved for access to capital.
Kountable has come up with a solution to facilitate the trade, but not in the normal way of providing capital to a reseller in the middle of a buy-sell trade, but by using a cloud-based technology infrastructure, and leveraging operational capabilities in a Cayman entity that takes control of good Freight on Board and sells them CIF to generate offshore revenue.
It’s not for the faint of heart, but one of the founders, Craig Allen, has been doing this for a number of years with banks and others in the Middle East and Latam.
Kountable uses a mobile device to do 3 major things:
In January, Kountable closed a $150M Line of credit and every 30 days they post these trade assets and draw down LOC. With a $150M line, Kountable can scale to $400M to $600M in trades.
Kountable has a number of ways to find resellers in these markets. First is just referrals from banks. Second, is the large manufacturers like Cisco and Philips who refer resellers to Kountable. Their dealer network just cannot get enough local finance. They will issue a PO to their resellers who just cannot find traditional finance with banks.
It’s a very interesting model, and one that helps these emerging market resellers source medical equipment, computers, etc. to much needed projects.
As a kid growing up in Boston in the 1990s, my top sport was American football. I spent most of my time on the field either catching passes on offense or trying to prevent other people from catching passes on defense.
Everyone has suddenly become much more aware of the very real role that functioning supply chains play in our quality of life, as individuals and societies, and that broken supply chains can, in fact, cost lives. The question of the day, month and year is, how do we fix them, and quickly? With a bit of support, SMEs can be a big part of the solution.