As part of its commitment to improving social and economic inclusion, Contour’s purpose-built network will allow SMEs in Bangladesh to manage working capital more effectively by speeding up Letter of Credit (LC) processing times. Contour plans to onboard more than 50 corporates supported by Bangladeshi and international banks in the next six months.
LCs are the one of the most popular trade payment methods in Bangladesh. Much of the country’s economic growth is driven by domestic trade, where usage of LCs enables companies to significantly reduce the risk of non-payment for delivered goods.
Despite this, the traditional paper-based processes and systems underpinning LCs are archaic and create significant barriers for SMEs seeking to grow their trade within Bangladesh, adding unnecessary complexity, cost, and delays.
Contour’s fully digital, end-to-end trade service connects SMEs, MNCs, financiers and partners seamlessly across the financial and physical supply chains. The new domestic Bangladesh network has been tested extensively and works effectively for local and international transactions, showing significant efficiency gains for both. It provides support for both local and foreign banks.
Bangladeshi corporates and banks are keen adopters of blockchain technology for LC transactions, and Contour has already made significant inroads having been the first to enter the market. Last year, Contour facilitated both the first blockchain LC in Bangladesh, and the first execution of an interbank blockchain LC transaction by a Bangladeshi bank. In addition, earlier this year, a local bank executed the first ever cross-border Islamic blockchain LC in Bangladesh on Contour.
Carl Wegner, CEO at Contour said: “Trade has the power to lift communities out of poverty, connect cultures and bridge economic gaps. Despite this, many small businesses in countries such as Bangladesh still find trade-fuelled growth out of reach because of the obstacles created by antiquated trade finance processes and limited access to trade finance itself.
“Contour’s common decentralised network gives companies of every size more opportunities to do business, including new entrants who now have unrestricted access to global markets and finance for the first time. This is our first domestic LC offering, and we look forward to further accelerating banks and corporates with tailored propositions for individual countries in the future.”
Recently named Leader in Trade for Digitalisation at the 2021 GTR Awards and as Best New Trade Finance Technology Solution Provider in Asia and Singapore at the 2021 Global Banking & Finance Awards, Contour has been widely recognised for pushing the boundaries of innovation and driving greater economic, social, and environmental sustainability in global trade.
Source : Finextra