I am going to be a regular on your substack now marc. This was a brilliant read.
One question, how do you keep track of all the financial related news across the world? Is there a go-to place for you to read or a list of websites you keep track of?
Would you say Greensill is just one single bad example out there but SCF in itself is value adding to SMEs which otherwise dont have many alternatives out there. I still see SCF as very helpful. In China, the concept is even developed further with multi-tier financing which has been super-charging the domestic supply chain development
To me, the reverse factoring (supply finance), as described above, is a scheme to further squeeze a couple of percentages from one's suppliers.
Convincing Vodafone to be an investor is pretty shrewd: it's an easy way to originate business by incentivizing Vodafone to "offer" reverse factoring to its supplier base as well as mitigate the main risk, i.e. discounting invoices that are frauds or with strings attached (warranties etc). If Vodafone is an investor, it will only offer to the securitization pool invoices it has a clear intention to pay on time.
I bet the suppliers are mostly small businesses thrilled to have a big name client.
Brilliant Read as always Marc
I am going to be a regular on your substack now marc. This was a brilliant read.
One question, how do you keep track of all the financial related news across the world? Is there a go-to place for you to read or a list of websites you keep track of?
Brilliant read. Great insights.
Thanks Marc for the this brilliant piece.
Would you say Greensill is just one single bad example out there but SCF in itself is value adding to SMEs which otherwise dont have many alternatives out there. I still see SCF as very helpful. In China, the concept is even developed further with multi-tier financing which has been super-charging the domestic supply chain development
To me, the reverse factoring (supply finance), as described above, is a scheme to further squeeze a couple of percentages from one's suppliers.
Convincing Vodafone to be an investor is pretty shrewd: it's an easy way to originate business by incentivizing Vodafone to "offer" reverse factoring to its supplier base as well as mitigate the main risk, i.e. discounting invoices that are frauds or with strings attached (warranties etc). If Vodafone is an investor, it will only offer to the securitization pool invoices it has a clear intention to pay on time.
I bet the suppliers are mostly small businesses thrilled to have a big name client.
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