Every year, UNICEF distributes nearly $3 billion in high-value goods and lifesaving assistance in more than 150 countries and territories to reduce the number of children who die from preventable causes. As one of the world’s largest buyers of lifesaving commodities such as mosquito nets, malaria medicine, vaccines, education materials and hygiene equipment, UNICEF has a large supply chain network to deliver critical supplies to children even in the most remote areas.
UNICEF is funded entirely by voluntary contributions from individuals, businesses, foundations and governments, and has limited options to manage its cash flow since it is prevented by its Charter from borrowing. When financial bottlenecks occur along the supply chain and delay the delivery of medicine or nutritional supplements, it can be a matter of life or death for children.
Based on the principles of factoring and invoice discounting, the United States Fund for UNICEF created a facility to close the timing gap between a funder’s pledge of support and its release of funds. When a funder pledges to purchase specific goods, the UNICEF Bridge Fund quickly evaluates that pledge and then deploys the funds to make that purchase happen more quickly.
AGC supports the Bridge Fund which allows UNICEF to meet the next urgent need to purchase lifesaving commodities without delaying until a funder distributes the cash. The Bridge Fund provides more time for UNICEF to order goods, which can secure better pricing without sacrificing quality. Most importantly, when goods reach children more quickly, more young lives are saved.
This investment demonstrates how critical receivables finance can be to improving the efficiency of supply chains upon which millions of people depend.
