Three organizations teamed up to provide financing for suppliers of energy and chemical company Aramco by establishing what they said is one of the world’s largest supply chain financing programs.
Aramco, Taulia and the Saudi Industrial Development Fund (SIDF) announced their signing of agreements to establish the supply chain financing solution in a Tuesday (Oct. 29) press release.
“Together with our partners, we are introducing this FinTech solution for our suppliers, offering them access to a unique and competitive financing opportunity,” Ziad T. Al-Murshed, chief financial officer and executive vice president of finance at Aramco, said in the release. “This platform also provides an investment opportunity for banks to participate as finance providers, enhancing the solution’s scale and viability.”
The new solution aims to unlock billions of Saudi Riyals in liquidity; provide Aramco’s suppliers with an alternative and competitive source of financing; enhance their liquidity and cash forecasting accuracy; and reinforce Aramco’s supply chain resilience, according to the release.
Cedric Bru, CEO at Taulia, which is an SAP company and a FinTech provider of working capital management solutions, said in the release that the solution will enable thousands of companies to access early payments.
“Our goal is to ensure that cash flows fast and easily towards suppliers,” Bru said. “When done at scale, it creates opportunities for growth and investment for these businesses. We are tremendously excited and proud to make that a reality for Aramco and its trading partners.”
It was reported in April 2021 that Aramco was exploring a supply chain finance initiative that would finance billions of dollars per month in payments to suppliers. The report said the firm had more than 10,000 suppliers in its home country of Saudi Arabia.
Energy company Eni launched a supply chain finance program designed to incentivize sustainable development in March 2023.
The company’s Sustainable Supply Chain Finance Program is focused on the energy supply chain and allows Eni’s suppliers to request advance payment of invoices if they have committed to sustainable development.
In an earlier, separate collaboration, Taulia teamed up with Visa in March to enable virtual payment credentials to work natively across SAP business applications.
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