London-headquartered payments company 3S Money has launched a trade finance fund providing multi-currency loan facilities for SMEs struggling to access support from international banks.
The fund is managed by 3S Capital Partners, a wholly owned subsidiary based in the Netherlands and aims to lend at least £100mn over the next three years to smaller and mid-sized companies. Loans will start from £250,000 with flexible durations, 3S Money says.
The fund’s primary focus is on European borrowers, but will also serve customers in Asia, the US, Australia and some markets in Africa and Latin America. Trade activity supported includes import and export of soft and hard commodities, niche products and finished goods. 3S Money’s chief executive, Ivan Zhiznevskiy, says SMEs “tend to offer steady flows of low-risk and good returns for our investors”, yet often find their access to finance limited in the traditional banking sector. The Asian Development Bank has suggested that the gap between demand and supply of trade finance grew 15% between 2018 and 2020, reaching an estimated US$1.7tn. In commodities trading, international banks have scaled back the levels of financing provided to smaller traders, focusing instead on the larger end of the market.
“As the availability of capital tends to concentrate on global banks who prefer doing large deals – the same amount of work for more profit per employee – smaller traders are cut off from quality trade finance products,” Zhiznevskiy tells GTR.
The company adds it has already completed its first trade finance deal, providing a €2mn facility to an Estonian trader looking to expand agricultural commodities exports into Belgium and the Netherlands. 3S Money is authorised as an electronic money institution in the UK, and has previously provided corporates with local business accounts in different markets, making it easier to send and receive payments. Zhiznevskiy says this status means users of its trade finance funds will also benefit from access to payments infrastructure and correspondent banking networks.
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