Want a Healthier Global Economy? Unleash the Power of Working Capital
27 June 2022 |
Heads of state, corporate leaders and others are turning to a better solution for supply chain problems.
Every morning, it seems, most of us wake up to the latest terrible news about the state of the world. But every so often, we’re reminded that it’s not all bad.
Recently, I was able to spend time alongside the problem-solvers tackling our planet’s most pressing challenges. At the World Economic Forum in Davos, Switzerland, I met heads of state, corporate leaders and innovators who are developing solutions to make life better and more prosperous for everyone, whether through the creation of new trade policies or next-gen, hydrogen-powered aircraft engines.
C2FO was there because we, too, have found a way to address a global issue that was especially topical at Davos: the state of the world’s supply chains.
After decades when a global network could consistently produce “just-in-time” delivery of critical goods and services, more companies are grappling with long delays, runaway inflation and other forces.
Because just-in-time isn’t as reliable now, businesses are adopting a “just-in-case” approach to inventory and stockpiling items that are critical to their ability to operate. Those larger orders drive up the working capital needs for those companies, and at the same time, the cost of that capital is increasing as interest rates rise.
Now more than ever, the world needs easier access to working capital so businesses can keep the lights on and continue to invest in their growth.
At C2FO, we’ve built a powerful solution that accelerates payments — suppliers can be paid months earlier in exchange for offering a small discount to their customers. This approach unlocks billions from balance sheets and supports companies of all sizes in the supply chain. And we’re doing all this while generating benefits for all parties, be it the corporate buyer, the supplier or the banks.
An increasing number of leaders are waking up to the importance of working capital and how it can provide the necessary fuel for economic growth.
We had many discussions during Davos around the ability of the C2FO platform to address and offset the rising costs in the supply chain, preventing financial value leakage in the supply chain while also eliminating risk. That, in turn, allows our corporate clients to provide preferred payment terms and other tools of inclusive finance to support their goals around environmental, social and governance (ESG) initiatives.
Having cracked the code on how to deliver these programs on a large scale, we had significant interest at Davos and held discussions with governments around our ability to deliver National Working Capital Platforms. These country-level platforms would support and stimulate economic development and job creation through financing to small to midsized enterprises (SMEs) — a priority for most governments.
If we want a healthy global economy, we need a world where small, midsize and diverse-owned companies, not just the behemoths, have the ability to thrive. And one of the most important resources required for that world is fair, reliable access to working capital.
The fact that decision-makers at Davos and beyond are recognising that is good news for all of us.