The GTR Mena Trade Finance Week is well known within the Trade Finance community as one of the most successful events in the region. This is the reason why the ITFA board was keen to support the event through an ITFA led workshop. Our own Zeyno DeVries-Davutoglu, Board Member and Chair of the ITFA educational committee led the Stream B workshop. Opening the workshop, Zeyno highlighted the benefits of being an ITFA member and the value the association adds to companies, financial institutions and intermediaries.
The workshops were structured around presentations with the speakers facilitating discussions to allow all participants within the individual groups to enter into practical discussions. ITFA would like to thank the facilitators within their workshop who played a key role in making this happen.
Gary Slawther, Director, Corporate Advisory Resources explained the way such receivables are discounted placing emphasis on the Standard Definitions for Techniques of Supply Chain Finance, non-recourse financing of receivables discounting, forfaiting, factoring and payables finance. This workshop was moderated by Lorna Pillow who highlighted the popularity of the technique to effectively manage cash flows and risk mitigation. Falling margins, surplus liquidity, fewer assets that meet the Banks’ narrowing framework were amongst the topics discussed. Anirudha Panse, Executive Director at NBAD, provided insight on the popularity of receivables financing in the Mena region and what makes the region so resilient even in the midst of mounting political and economic turmoil including the low oil price environment. The recent discussions with Moody’s on Abengoa’s treatment of debt sparked interest amongst the banks who continued to discuss this well after the workshop closed. ITFA will be producing a paper on this theme.
Anurag Chaudhary’s presentation on Supply Chain Finance, also called Payables Financing or Reverse Factoring, focused on real life examples extracted from Citibank’s Supplier Finance programme and the popularity as well as success of the programme with leading buyers and suppliers. Anurag focussed on the legal documentation in originating such bi-lateral programmes leading to a global standard documentation. A case study on Rolls Royce in extending support to their suppliers was very well received by the audience. This gave the audience some insights on how to structure solutions for their clients and was the stepping stone for various methodologies for risk mitigation and asset sales.
Harish Parmeswaran, Group Chief Operating Officer, Tawreeq holdings, delivered a presentation on the buyer led programmes.
For the third work stream on Risk Mitigation and Insurance, Silja Calac explained the current regulatory challenges faced by banks under Basel III. ITFA recently published Guidelines for its members concerning the use of non-payment insurance as an eligible unfunded credit protection for credit risk mitigation. This followed another initiative that ITFA took in producing a legal opinion to satisfy all ITFA members requirement in ensuring that the BAFT MPA is legally effective, enforceable and meets the criteria of the regulatory requirements within the EU. Silja mentioned to all those present the work that is currently being done jointly with BAFT in updating the current MPA agreement and which will be also available to ITFA members. Risk Mitigation and distribution of assets led to an active discussion on the BAFT MPA agreement and Credit Risk Insurance, which was moderated by Paolo Carrozza, Commercial Director, Euler Hermes Middle East. ITFA would like to thank Paolo Carrozza for his contribution. This session consisted of a briefing on the growth in the insurance market and its key benefits in acting as an alternative distribution channel.
ITFA would like to convey their gratitude to GTR as their Global Media partner in closing another successful event. Those present from the ITFA board held a meeting with the MENA regional committee and active ITFA members to provide insights as to the enhanced role that ITFA would like to have in the region. Throughout the conference, the feedback to ITFA board members was very positive and the MENA Regional Committee is planning an event in Dubai for April 2017. More details to be provided shortly.