FCI, the open account factoring and receivables finance industry body formerly known as Factors Chain International, has signed a framework legal agreement with working capital solutions provider Demica to allow FCI members access to its supply chain finance platform.
FCIreverse will be made available to the network of nearly 400 banks and factoring firms at the end of the pilot stage, which should be completed by the end of 2018. It represents the first ever SCF agreement signed between a global trading network and a major technology partner, according to Demica.
Once fully operational, FCIreverse will allow FCI members in 90 countries to fund their clients’ suppliers anywhere in the world “in a transparent and seamless manner”.
It will be open on a pay-as-you go basis, which FCI says will allow members which focus on smaller companies to “economically” offer reverse factoring, thus helping to “open up the reverse factoring market beyond the large corporates with revenue greater than US$1 billion that are, to date, the primary market using this product”.
FCI and Demica originally announced their partnership to develop the platform last June, after the industry body selected Demica from three finalists after an extensive request for information process in 2016 and a subsequent request for proposals. At the time, both parties indicated that the first pilots would be launched in Q3 of 2017.
Explaining the delay, Enrique Jimenez, Demica’s senior director for SCF, said the partners have been “having discussions with several FCI members to become pilots of the project while legal arrangements were discussed”. The pilot could now commence as “a number of entities have been identified” to test the solution.
Further details on FCIreverse and SCF in general will be presented when FCI holds its 50th annual meeting in Amsterdam from 10th-15th June.