MEGA is a Macedonian meat producer that exports to Mediteran Group, a supermarket in Kosovo. They found it difficult to meet order demand and manage cashflow on 30 day payment terms.
Macedonia is a small, land-locked country and SMEs often look across the region for expansion. But access to financing for growth is limited because banks normally do not offer cross-border trade finance for SMEs.
AGC partnered with the first factoring company licensed in Macedonia to support cross-border factoring transactions for Macedonian SMEs. AGC has provided the factor with a revolving credit facility to on-lend to SMEs.
AGC conducted its due diligence and approved a transaction to finance €100,000 worth of orders between MEGA and Mediteran every month based on their annual contract. After the first advance in November 2013, Mediteran re-paid the invoice within 30 days, and MEGA was able to receive financing for another batch of invoices for additional orders immediately. MEGA now has a consistent form of financing that improves its cash flow.
By partnering with a local financial institution, AGC is able to finance SMEs that would not be able to access finance.