BancABC�s Purchase Order Financing Empowers SMEs
Pauline Dikuelo | Monday April 3, 2017 14:58
POF is a tripartite arrangement in which a supplier takes their Government purchase order to the bank for financing on agreement that once the supply has been delivered, Government would then pay back the bank directly while the balance goes to the service provider.
In an interview with Monitor Business, Maruping said the aim of the facility, which was incepted about three years ago, is to take away the risk from the client by financing their purchase orders so that they deliver on the tenders.
“We appreciate the overwhelming response that we got from the industry. This is a short-term solution to help businesses that have won tenders but don’t have the money to deliver,” he said.
According to Maruping, through the facility they offer a minimum amount of P30,000 and a maximum of P5 million, adding that they do consider other amounts below the minimum amount or above it. Maruping said that the facility is open to BancABC clients as well as those who do not have accounts with them.
Through the facility, the bank has assisted businesses across different sectors including pharmaceuticals, motor industry, distribution, supplies, and agriculture just to mention a few. “We assist anyone who has a purchase order but do have a credit vetting process.
We understand that most of the SMEs do not have collaterals, as most of them are startups, hence the reason why we chose to help them.
The idea is to grow them as you know that the industry can boost the economy and create employment,” he said.
Further, he emphasised that the SME sector has the potential to diversify the economy and as a bank they need to support them and play their part.