When Networks Bring People Together, Progress Happens
The International Finance Corporation (IFC), the World Bank’s private sector arm, set out to provide relief to businesses in emerging regions as the 2020 pandemic roiled global markets. Stephanie von Friedeburg, MD and COO of the IFC, looks back on the year in a recent podcast where she reflects the following:
“There's been a substantive hit on supply chains, trade shocks. And so our trade finance business, which has always been a core of our business, has grown very substantially. And we've seen it in the poorest countries in particular, where we know that we need to continue to keep trade flowing. So we've seen an increase in trade finance in that relief piece. We've also seen many of our existing clients needing working capital and needing liquidity, and we believe it was important for us when we typically don't do a lot of liquidity or working capital, but important for us to step in and help our existing clients to withstand the crisis, keep them solvent so that when we come out of the crisis, we can rebuild faster and better.”
IFC is a longtime partner on the Infor Nexus platform that plays a pivotal role in not only financing trade to help raise living standards in poverty stricken areas of Africa and Asia, but also in promoting responsible business practices and efforts to serve the greater good of the planet. IFC’s supply chain finance programs that are tied to sustainability metrics and reward suppliers for positive actions have been broadly praised and recognized in the past. In the face of the 2020 pandemic, the IFC found itself in a position to create greater value towards relief efforts.
In the podcast, von Friedeburg cites Hela, a clothing manufacturer based in Sri Lanka that produces goods out of Kenya and Ethiopia. Operating on the Infor Nexus network, Hela serves major apparel brands and receives financing through the IFC. When demand for their pants, shirts and dresses dried up, Hela moved quickly. As von Friedeburg describes, “They converted a big piece of their factory to create protective gear for hospitals and have begun exporting that across Asia.”
From the crisis arouse opportunity. In early Spring there was limited production of protective gear in Africa. Hela utilized its resources and access to capital to re-tool its manufacturing facility in Kenya, where it had been producing men’s underwear. According to the IFC, “Hela produced 10 million face masks in Kenya in April and May, 90% of which were standard three-ply surgical masks, with the remaining 10% being reusable fabric masks.” The company also began production of more sophisticated N95 respirator masks for distribution across Africa.
The term “power of a network” is sometimes overused and value is not always cut-and-dry. But in the case of IFC and Hela, it’s actually very straightforward: when enterprises and people come together, with access to information, tools and capital, good things happen. Barriers that once existed previously prohibited businesses - and sometimes entire segments or geographic regions – from progressing.
Fortunately, many of the technological, financial and geographical challenges that previously walled off enterprises from global commerce continue to be erased by technology and the democratization of information, communication and capital. The magic that occurs, however, isn’t in the technology or data itself; but rather, it’s real people coming together to tackle challenges when given the opportunity to do so. This is the real power of a business network.
To learn more about innovative finance opportunities through a supply chain network, check out the best practice guide.