Suppliers, who often face cash flow challenges due to extended payment terms imposed by large buyers, can now access cash immediately by selling their invoices on technology platforms like Addendum.

Simultaneously, buyers benefit as they could extend their procurement payment periods and retain more liquidity to manage their operations effectively. This dual benefit strengthens both ends of the supply chain, while creating an attractive new asset class for investors and local banks to consider.

The initiative was unveiled at the Working Capital Summit held at African Alliance’s offices in Matsapha on Thursday, where key stakeholders gathered to discuss creating a sustainable financial ecosystem that supports small and medium enterprises (SMEs), corporates and investors alike in one pivotal move designed to expedite national economic growth as well as earn competitive yields.

Addendum Financial Technologies was invited to present as a potential platform provider, as a suitable technology platform is a key piece in the SCF solution. Addendum representatives presented that at the core of the platform were trade receivables (invoices) that suppliers discount on the technology platform. Addendum Financial Technologies Supply Chain Finance Manager Tokelo Matlou said the asset class leveraged the typically lower credit profiles of suppliers, which in isolation would command higher funding costs.

However, he said by structuring the transaction so that the ultimate credit risk rests with the buyer, the model creates a balanced risk–reward dynamic. Investors, on the other hand would benefit from exposure to higher-yielding instruments that are backed by stronger buyer credit ratings effectively securing above-market returns at more than attractive credit risk levels. The move is designed to expedite national economic growth while offering investors competitive yields.

“Supply chain finance bridges a crucial economic gap by freeing up cash flows across the business value chain, creating a win-win situation for the parties involved. At the core of the platform are trade receivables (invoices) that suppliers discount on the technology platform.

This model is engineered to be highly appealing to investors. The model cleverly leverages the ultimate credit risk of the buyer, who typically has a stronger credit rating than the supplier. Investors thus gain exposure to higher-yielding instruments that are backed by the stronger buyer credit ratings, effectively securing above-market returns at attractive credit risk levels,” he explained. Furthermore, the short-term nature of these instruments allows them to function similarly to treasury bills, with the ability to revolve at maturity, offering favourable liquidity windows for both banks and institutional investors.

African Alliance Alternatives envisions this launch as more than a product but as a catalyst for building a financing ecosystem that fosters SME development, supports large corporates and mobilises capital from investors seeking impactful opportunities and favourable returns.

“Supply chain finance is about more than working capital efficiency it is about empowering businesses, unlocking capital and creating a win-win for suppliers, buyers and investors alike,” commented African Alliance Asset Management General Manager Victor Langa at the summit.
With the support of Ziada and the cutting-edge capabilities of technology platforms like Addendum, African Alliance’s supply chain finance solution is set to transform how businesses manage liquidity and investors engage with trade finance opportunities, marking a new chapter in financial innovation for Eswatini.