MineHub Technologies launches trade finance application
By Edlyn Cardoza
MineHub Technologies Inc. has announced the launch of its Trade Finance network application, available to all platform users. The Trade Finance application is the first in a series of network applications MineHub will be launching in the coming months.
MineHub Trade Finance is a network application, bringing visibility, security, and efficiency to financiers of commodity transactions whilst digitizing administration and communication between lenders and financiers. Integrated with the core MineHub platform, this service is an additional offering that further increases the value of the MineHub platform to its users.
Arnoud Star Busmann, CEO at MineHub and formerly of ING Bank, the world’s largest commodity bank, said, “Having had multiple years of experience with the complexity and key risk drivers of commodity trade finance made this application the highest priority solution on our roadmap. The value proposition is very clear. Blockchain technology and solutions like MineHub Trade Finance are likely to forever change the ways of working in the commodity trade finance industry with a key goal to unlock access to essential working capital critical for the world economy.”
MineHub is an open, enterprise-grade platform for digital trade, bringing transparency, resilience, and responsibility to mining and metals supply chains. The platform connects the many parties involved in physical commodity transactions in a digitally integrated workflow by operating based on shared information secured by a global enterprise blockchain network. This provides greater efficiency, security, and transparency relative to the current paper-based and manual processes.
Banks have been decreasing their exposure to commodity trade finance, and the Asian Development Banks estimate that the global trade finance gap is already at $1.7 trillion. Some of the supply chain disruptions the world is witnessing are a direct consequence of a lack of trade finance liquidity. At the same time, institutional investors and alternative lenders have a surplus in the capital looking for yield. They are looking for channels to get exposure to commodity trade finance as an attractive asset class. Now MineHub is opening up that channel.
The MineHub trade Finance application connects borrowers to their financiers via a secure communication channel to request finance, receive and share relevant documents and information authenticated by third parties like service and logistics providers. The service results in significant cost and time savings for both the lender and the borrower while removing many currently present opportunities for fraud and errors.
The application enables financiers to access the real-time transaction data set of each transaction, giving them a direct line of sight to relevant events, developments, collateral, and assets they are financing. The origin and provenance of data and documents are recorded in an immutable audit trail secured by blockchain technology. Users can verify the authenticity of key documents like inspection reports, invoices, and warehouse receipts and improve control over key risk events like collateral releases and assignments. In addition, users can immediately verify compliance of transactions such as ESG lending criteria.
Key benefits include:
- Save on administration costs and time: reduce the need for sending and reconciling documents across multiple channels; maintain all finance administration and communication in one easy to access location, organized per transaction; information is available in real-time.
- Reduce opportunities for fraud and errors: by providing financiers with digital eyes – for example, with direct and real-time visibility of transactions and collateral, the incentive and opportunity for fraud are dramatically reduced; the ability to instantly verify the authenticity of documents is transformational.
- First to act: events and developments that increase risk or affect the position of the financier are immediately visible, enabling immediate action to mitigate the risk.
- Improve access to capital: by automating risk controls and reducing the complexity of administration, more financiers and insurers will be exposed to this profitable financial service which is also essential for all supply chains to keep working.
MineHub is also integrating with partners to further increase the breadth and depth of trade finance services that users can access via the MineHub platform. For example, the recently announced partnership with Contour will provide MineHub users access to electronic Letters of Credit.
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