Sri Lankan Apparel Exporters Grow Faster with IFC'S Trade Supplier Finance Facility
January 16, 2014-Garment manufacturing and export plays a major role in Sri Lanka's economy and provides employment to about 12 - 15 percent of the population. IFC is helping leading Sri Lankan apparel manufacturers access additional financing, creating opportunities for the sector to expand.
Sri Lanka is among the top apparel producing countries in the world relative to its population. But with the lengthening of supply chains and production becoming more global, buyers in international markets are extending payment times, while suppliers need money early in the production cycle for raw materials and operating expenses and labor. For apparel manufacturers in emerging markets like Sri Lanka, there is a limited supply of such supply chain financing options.
Flexible, Affordable Finance to Boost Trade
IFC is helping two of Sri Lanka’s leading apparel manufacturers, Brandix and MAS Active, overcome such difficulties with supplier finance facilities through its Global Trade Supplier Finance program.
The program provides short-term finance to emerging market suppliers and small and medium sized exporters. This facility helps to address the global shortfall in supply chain finance.
When MAS Active or Brandix submit an eligible invoice from selected international buyers like Columbia Sportswear and Phillips-Van Heusen, they can receive early payment from IFC at a modest discount. A simple click of a mouse will provide these companies with access to much-needed financing. It will help grow their business and boost opportunities for trade.
These are IFC’s first such supplier finance facilities for apparel manufacturers in South Asia.
Helping Small Businesses Grow
IFC’s trade supplier finance program works with buyers across industries that source goods in emerging markets. This helps reach thousands of small and medium sized suppliers in selected countries.
“Financing production cycles can drain working capital and borrowing capacity that suppliers need to operate their businesses,” said Adam Sack, IFC Country Manager for Sri Lanka and Maldives. “IFC’s trade supplier finance program will help Brandix and MAS Active access financing easier, grow their business and effectively manage risks.”