Best Supply Chain Solution Winner: Hindustan Unilever Limited

Published: Feb 2023

Hindustan Unilever Limited (HUL) is a listed public company incorporated in 1933 and is India’s largest fast-moving consumer goods (FMCG) company. On any given day, nine out of ten Indian households use one or more of HUL’s brands. It is based out of Mumbai, India and has about 21,000 employees with sales of more than INR500bn (Financial Year 2021-22). HUL is a subsidiary of Unilever, one of the world’s leading suppliers of Food, Home Care, Personal Care and Refreshment products with sales in over 190 countries.

in partnership with

Five supply chain financing programmes deliver benefits for HUL, its suppliers, customers and retailers

The challenge

HUL had launched Eco-System Financing Program to support financing needs of its suppliers, customer and retailers in order to support them during critical Covid-19 times when they were reeling under the lockdown, delays in payments and limited sales apart from difficult macro environment depressing the business sentiments.

The solution

In partnership with multiple banks and fintech companies, including C2FO, HUL has created the following programmes to support its ecosystem:

  • Dynamic discounting programme based on C2FO’s platform, to enable early payment to suppliers in lieu of cash discount. This programme has enabled on-demand early payment to the suppliers to manage their working capital requirements. The discount rate is dynamic and dependent on multiple factors that include macro-economic rate environment, payment value, supplier transaction history and tenure of discount. This programme has seen wide acceptability with 400+ vendors participating with a repeat rate of more than 70% of suppliers opting for early payment. On an annualised basis invoices worth US$200m have been financed.
  • Channel finance programme for customers (distributors) at competitive rates. Under this programme HUL created a framework to identify customer specific financing needs to decide upon the commercial considerations. More than 15% of HUL’s distributors participated in the programme thus contributing to US$800m+ in annual collections.
  • Pre-shipment financing programme to assist working capital financing against POs issued by HUL to its suppliers. Under this programme, HUL’s suppliers obtain financing at affordable rates in lieu of their existing costly financing alternative. The affordable financing is possible due to HUL’s strong banking relationships and credit rating. Further, the facility is tailor-made for each supplier considering the factors like supplier’s business with HUL, legacy of relationship and business dependency on HUL. The programme has seen a significant reduction in the working capital cost of suppliers and consequently benefitted HUL in its procurement cost.
  • Post shipment bank financed invoice discounting programme to enable early payments of invoices to suppliers at competitive discount rates. This programme provides an option to suppliers to obtain working capital finance in stringent liquidity conditions and today more than US$80m invoices are being discounted annually.
  • Enabling easy access to credit to retailers: in India, millions of retailers find it difficult to access credit because of their informal operation and reliance on manual processes and payment methods.  These retailers relied on informal markets to borrow money at exorbitant rates. HUL partnered with State Bank of India (SBI), the bank with the largest network in India, to enable these businesses to access credit. Under the term of this partnership, retailers can access instant credit up to INR50,000 without any paperwork. The rate of interest under the partnership is a fraction of the rates being charged by informal sectors and is one of the cheapest in the market. The programme has an indirect benefit of promoting financial inclusion in credit starved section of the society.

Best practice and innovation

Some of the key highlights of the programmes are as follows:

  1. Speedy sanction in less than 24 hours for credit limit of up to US$100,000 provided by a partner bank to customers (distributors) under the channel finance programme.
  2. Host-to-host connectivity with bank/fintech servers enabling benefits like real-time credit monitoring, collections, payments and billing visibility in channel finance.
  3. Mitigating risk through collaterals provided to banks under the secured channel finance programme enabling a sustainable growth avenue for HUL, banks and the distributors.
  4. API based solution to provide instant credit sanction to retailers based on sales history and credit bureau checks thus digitising the entire credit application journey.
  5. Using the power of algorithms to enhance the cash productivity of HUL and providing an affordable financing to vendors via dynamic discounting programme.

Key benefits

  • Financing at competitive rates.
  • Supplier’s stickiness to HUL’s ecosystem since HUL arrange cheaper financing.
  • Higher return on investment (ROI) to HUL’s distributors.
  • Automated workflows leading to faster onboarding, sanctioning and utilisation.


The eco-system financing programs address the specific needs of HUL’s partners and thus unlock their potential. In helping its partners grow, HUL also benefits by achieving its strategic objective of consistent, competitive, profitable and responsible business growth.

The Adam Smith Awards Asia is the industry benchmark for best practice and innovation in corporate treasury. The 2022 awards attracted a record-breaking 416 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia

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