Photo of Henry Byrne, Microsoft, Eric Standing, Standard Chartered and Neil Doyle, Microsoft.
Working with Standard Chartered, Microsoft has developed a non-recourse receivables financing solution where payment terms can be extended to 210 days on a fully disclosed transaction.
Senior Manager – Structured Finance
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Facilitating sales in difficult times
With many African economies depending on exports, the slowdown in the economies of their major trading partners like China has hit hard, with many governments struggling with current account deficits. These economic headwinds impact Microsoft’s sales directly and see its clients requesting longer payments terms.
However, as the company has seen in other regions such as the Middle East, in times of crisis, government agencies often look towards technology in an effort to streamline processes and become more productive. This then provides a great opportunity for Microsoft to grow in the region.
Microsoft therefore set about developing a short-term financing solution to offer its end customers a longer period to process payments so that its customers do not hit their credit threshold, which impacts Microsoft’s ability to seek additional sales.
Working with Standard Chartered, Microsoft has developed a non-recourse receivables financing solution where payment terms can be extended to 210 days on a fully disclosed transaction. This was finalised in June 2016.
Before Microsoft could begin rolling out the solution, however, it had to work with Standard Chartered to put together an approved list of clients that it could roll US$30+ of short-term financing to. With this shortlist, the Microsoft sales team and credit services organisation are now working through their deal flow to provide financing options to help expand their sales opportunities and also reduce their credit exposures.