The International Islamic Trade Finance Corporation (ITFC) has facilitated its first transaction with trade finance digitisation provider Bolero, as it works to grow adoption of digital trade solutions in its member states.
Last month, ITFC announced that a cash against documents transaction it orchestrated was successfully completed between Burkina Faso-based cotton company Sofitex and Louis Dreyfus Company (LDC), with an electronic bill of lading (eBL) issued on Bolero’s digital trade finance platform used to speed up the document flow.
The deal involved the shipment of Burkina Faso cotton from the Port of Lomé in Togo, to LDC in Asia, with global shipping and logistics firm CMA CGM issuing the eBL for the transaction.
“It took only five days from the time all documents were uploaded to Bolero until the payment was received, from previously 15-20 days,” an ITFC spokesperson tells GTR.
Abou Jallow, general manager of operations at ITFC adds in a statement that by using solutions such as Bolero’s, the multilateral financial institution can ensure “greater visibility, transparency, accountability, and control in the trade of strategic commodities such as cotton”.
Founded in 2005, ITFC has a mandate to support trade finance among the 57 nations that comprise the Organisation of Islamic Cooperation (OIC) members.
According to the ITFC document, cotton is one of the few cash crops grown in Burkina Faso and accounts for roughly 18% of its exports and 3% of its GDP.
ITFC has signalled plans to ramp up trade finance digitisation, and tells GTR that “it is now working with other member states to expedite the adoption of digital trade solutions with an aim to digitalise the whole trade flow end-to-end”.
The Islamic Development Bank (IsDB) member has displayed signs it is looking to increasingly deploy blockchain-based trade finance solutions.
In January, Bangladeshi bank City Bank partnered with ITFC to execute its first ever cross-border shariah-compliant blockchain-based letter of credit (LC) transaction on Contour’s platform.
ITFC acted as advising and financing bank on the deal, which saw an LC issued on behalf of Bangladeshi garment manufacturer Debonair Group, for the import of garment accessories from a Hong Kong-based exporter, Apparel Link (HK).
For its part, Bolero is working to roll out a new product to regional banks in Asia, the Middle East and Central and Eastern Europe.
In March, it announced the launch of a new white-label trade finance portal which allows banks around the world to offer digital trade services to clients without having to build out the technology themselves.
Galileo Trade Portal as a Service (TPaaS) is a subscription-based service for financial institutions that enables banks to offer digital trade services – such as creating, editing and managing letters of credit, electronic presentations and guarantees, as well as open account transactions and electronic bills of lading – via an online portal tailored with their own logo and branding.
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