(MENAFN- Golin Mena) Algeria – Citi has launched its first Middle East and North Africa (MENA) Sustainability-linked Supply Chain Finance (SSCF) program in Algeria with the aim of supporting clients as they advance their ESG priorities, improve the resilience of their supply chains and manage their working capital needs.
Supply Chain Finance (SCF) programs benefit companies and their suppliers as they prioritize their working capital positions respectively. In using Citi’s SCF program, for example, the bank would provide financing to a client’s suppliers from the date of collection of specific goods/provision of services to the date on which payment is owed to these suppliers. The cost of this financing is borne by suppliers at a rate lower than their usual cost of funds. As a result, suppliers benefit from cash flow acceleration, quicker payment, and improved financing costs.
Citi’s first MENA SSCF program has been implemented for German chemical and consumer goods company, Henkel. The program has been initially launched with suppliers in Algeria and will be expanded to include additional markets and suppliers in the coming months.
The program is also a first for Henkel in IMEAT and is targeted at existing or new suppliers who demonstrate strong or improving sustainability performance. Qualifying suppliers can access Citi’s supply chain financing at preferential rates, improving as a supplier’s sustainability score improves. Henkel, with the support of a global leading sustainability assessment agency, will periodically assess the sustainability performance of its suppliers.
Commenting on the collaboration, Bülent Pehlivan, Regional Head of Finance - India, Middle East and Africa said: “With sustainability being at the core of our company's strategy, we are engaging in a range of activities with new ways of growing and innovative solutions to create value. We are delighted to collaborate with Citi Group to introduce a sustainable supply chain financing program for the first time in the region. Launching first in Algeria, we are committed to continue to implement it in other countries of the region in the near future.”
Citi’s SSCF program in MENA aligns with the bank’s ESG commitments. To help accelerate the transition to a global low-carbon economy, Citi launched its updated Sustainable Progress Strategy in July of last year, which includes its global US$500 Billion Environmental Finance Goal. Citi also recently established a commitment to US$1 trillion in sustainable finance by 2030, which includes the environmental finance goal and a US$500 Billion Social Finance Goal.
“We are proud to be collaborating with Henkel in this first SSCF program in the MENA region. It is really pleasing to see that Henkel and Citi share a strategic focus on ESG. At Citi we are looking forward to this partnership and journey with Henkel which will ensure that we continue to adapt and develop our ESG solutions even further” said Dave Aldred. MENA Head, Treasury and Trade Solutions, Citi.
“We are excited to be partnering with Henkel and helping them to achieve their sustainability goals via the launch of the first Sustainable Supply Chain Financing Program for Citi in the MENAPT region. Like Henkel, our ESG commitments are an essential part of our firm’s strategy and we are committed to provide innovative ESG-linked solutions to our clients and to expand the use of our Sustainable Supply Chain Financing Program in the region,” said Marcel Hanen, Citi Regional Head of the Global Subsidiaries Group - Middle East, North Africa, Pakistan and Turkey
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