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Zim Receivables Marketplace (ZRM) Launched


The Zimbabwe Stock Exchange (ZSE) and the Harare Receivables Exchange Limited (HRE) have launched the Zimbabwe Receivables Marketplace Limited (ZRM), a receivables financing platform for working capital to spur emerging businesses.

This follows the memorandum of understanding signed in December last year between ZSE and HRE- a local startup that offers the platform for auctioning of outstanding invoices to buyers.

Receivables financing is when a business receives funding based on issued invoices. Those invoices refer to purchases made, but the payment hasn’t been received yet.

ZRM’s mandate is to offer working capital solutions through receivables financing. ZRM uses a Trade Receivables Discounting System (TRDS).

“TRDS is a formal mechanism set up in order to facilitate the financing of trade receivables of Small and Medium Enterprises (“SMEs”) from corporate buyers through invoice financing by multiple financiers. This step is deemed essential to enhance the trade account receivable management of SMEs,” the ZSE said in a statement.

TRDS systems are in use in other developing countries such as India.

Most companies have the bulk of their working capital tied up in accounts receivable, limiting their ability to fund the growth of their businesses and contribute to the growth of the economy.

On the Receivables Exchange, businesses sell their accounts receivable at competitive terms to a global network of accredited institutional investors that compete in real time to purchase them.

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There are several advantages of the TRDS to the Zimbabwean economy which includes; SMEs getting greater access to finance, at competitive rates without providing any additional collateral, corporates save on procurement cost through an improved negotiation of financing term for its vendors and Investors such as Asset Managers and Pension Funds get an opportunity to build their alternative asset portfolio.

ZRM with its strong order book in ZWL$ and financiers in USD$ is hence inviting potential financiers, potential corporates and their suppliers to come on board.

A receivables exchange platform plays a critical role in assisting suppliers avoid cash flow issues by providing financing solutions.

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