happiness Chikwanha
Edgar Vhera
Agriculture Specialist Writer
IN a move set to revolutionise the maize milling industry, Financial Securities Exchange (FINSEC) private markets and the Zimbabwe Mercantile Exchange (ZMX) have announced a strategic partnership to boost millers access to much-needed order finance.
FINSEC private markets is a leading financial solutions provider while ZMX is the country’s premier commodity exchange.
This collaboration aims to address cash flow challenges and unlock growth potential for maize millers across the nation.
A recent X (formerly Twitter) post by FINSEC said: “Millers, grind out your profits with FINSEC’s grain on credit facility. Secure grain on credit through order finance options. Financing is available at very affordable terms.”
ZMX chief executive officer Mr Collen Tapfumaneyi said maize millers are the backbone of Zimbabwe’s food security and play a vital role in processing the staple grain for the country’s millions.
However, securing a consistent supply of grain can be a major hurdle and supply chain disruptions due to liquidity constraints may result in reduced production and profitability for millers. Fluctuating market prices, limited access to working capital and the need for upfront payments often create a cash flow squeeze.
“Through this innovative partnership, FINSEC’s order finance programme provides maize millers with the financial muscle to overcome these challenges. The financing model involves access to grain on credit for millers through the ZMX exchange platform,” he said.
The ZMX infrastructure will be responsible for registering, vetting and screening of the small and large-scale milling agro- processors from which qualifying applications will be submitted to the liquidity provider. Upon approval the milling company will receive the commodity through the ZMX platform with the liquidity provider advancing payment to commodity suppliers on behalf of the buyers. The repayments will be done as guided by the transaction details.
Mr Tapfumaneyi said millers can access credit to purchase grain directly on the ZMX exchange thereby, eliminating the need for large upfront payments and improving cash flow management.
“FINSEC offers competitive interest rates and flexible repayment plans tailored to individual business needs. The prices of grain are determined by the market supply and demand conditions,” he elaborated.
ZMX acts as a secure platform for transactions, ensuring transparency and mitigating risk for both millers and suppliers.
He said with financing secured, millers can focus on their core business of producing high-quality maize products for consumers.
The financing provided under this order finance facility will be secured by outstanding receivables from various buyers, including retailers. The repayment period for the credit facility is 30 days. This short-term financing solution is designed to address the immediate cash flow needs of millers while ensuring a secure and efficient transaction process.
FINSEC is Zimbabwe’s first alternative trading platform, licenced and regulated by the Securities and Exchange Commission of Zimbabwe (SECZIM) as a Securities Exchange in terms of section 30 of the Securities & Exchange Act [Chapter 24:25], as read with the Securities (Alternative Trading Platform) Rules, Statutory Instrument 100 of 2016.
The FINSEC private markets is a market place that brings together private companies, banks, issuers, investors and various stakeholders seeking alternative investment opportunities to transact in one market place. The Private Markets platform seeks to assist businesses seeking to raise capital either debt or equity, business exchange, value discovery and receivables.
Online Reporter