Its purpose-built network will allow SMEs to manage working capital more effectively by speeding up LC processing times
Blockchain trade finance initiative Contour is now eyeing to offer Bangladesh's small and medium enterprises (SMEs) greater access to trade finance in the country.
As part of its commitment to improving social and economic inclusion, Contour’s purpose-built network will allow SMEs to manage working capital more effectively by speeding up Letter of Credit (LC) processing times.
The organization plans to onboard more than 50 corporates supported by Bangladeshi and international banks in the next six months.
Much of Bangladesh'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, said an article on Finextra.
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, it also said.
Contour’s fully digital, end-to-end trade service connects SMEs, MNCs, financiers and partners seamlessly across the financial and physical supply chains.
They made their debut in Bangladesh after helping Standard Chartered Bank execute Bangladesh's first ever blockchain LC for Viyellatex, an export oriented apparel manufacturer.
They were also responsible for helping the Hongkong and Shanghai Banking Corporation (HSBC) Bangladesh to carry out the first-ever cross-border blockchain LC in Bangladesh, involving the import of 20,000 tons of fuel by United Mymensingh Power Limited, Bangladesh from Singapore.
In addition, earlier this year, City Bank executed the first ever cross-border Islamic blockchain LC in Bangladesh on Contour.
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, said Carl Wegner, CEO of Contour.
Contour’s common decentralized 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, he also said.
"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," Wegner added.