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BAFT Releases New White Paper on Deep-Tier Supply Chain Finance

WASHINGTON – BAFT, the leading global financial services association for international transaction banking, and the Asian Development Bank (ADB) today released a new white paper, Deep-Tier Supply Chain Finance: Unlocking Potential, which highlights the potential for deep-tier supply chain finance (DTSCF) to bridge the trade finance gap, drive liquidity to the most underserved segments of the trade market and enhance visibility within global supply chains.

Deep-tier supply chain finance is an innovative financial solution with the potential to unlock financing for deeper tier suppliers, where small and medium-sized enterprises (SMEs) are prevalent, by allowing access to finance by leveraging the credit risk of the anchor buyer. DTSCF not only unlocks finance at favorable rates for deeper tiers in a supply chain, but it also promotes an ecosystem of financial stability, risk management, and sustainability throughout the entire supply chain.

BAFT and ADB developed this white paper to provide a shared view of DTSCF, to outline its features as a new technique in financing trade and supply chains, to define what DTSCF is and what it is not, and to offer necessary definitions and legal frameworks to make it a success at scale.

“We’re pleased to have been able to build on the initial work done by ADB on this subject to help identify the key considerations to successful deployment of deep-tier supply chain finance, which can be a useful tool to help address the persistent trade finance gap,” said Tod Burwell, president and CEO, BAFT.

“Deep-tier supply chain finance is an exciting innovation that has the potential to drive greater resilience in supply chains and unlock the potential for SME-led economic growth, job creation, and prosperity,” said Steven Beck, ADB’s Head of Trade and Supply Chain Finance Program. “The publication details the next steps required to overcome the challenges in scaling this innovation and we’re excited to tackle these with our public and private sector partners.”

Click here to read BAFT’s Deep-Tier Supply Chain Finance. The white paper is also available within BAFT’s Library of Documents under the Guidance and Industry Practices section.

About BAFT

BAFT, the leading global financial services association for international transaction banking, helps bridge solutions across financial institutions, service providers and the regulatory community that promote sound financial practices enabling innovation, efficiency, and commercial growth. BAFT engages on a wide range of topics affecting transaction banking, including trade finance, payments, and compliance.

BAFT Media Contact:
Blair Bernstein
Senior Director, Public Relations
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+1 (202) 663-5468

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