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Receivable’ Finance Programs’ characteristics and benefits

Receivable’ Finance Programs’ characteristics and benefits. Tycjan Bielecki Distributors’ Finance Unit Head. What is a Distributor’s Finance Program?. Distributors’ Finance Program is addressed to the selected distribution channels of the Sponsor

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Receivable’ Finance Programs’ characteristics and benefits

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  1. Receivable’ FinancePrograms’ characteristics and benefits Tycjan Bielecki Distributors’ Finance Unit Head

  2. What is a Distributor’s Finance Program? Distributors’ Finance Program is addressed to the selected distribution channels of the Sponsor It is a settlement tool, aimed at offering additional attractive financing for Sponsor’s commercial partners, optionally with an element of distribution channel risk-sharing between Sponsor and the Bank. 1- Order 4- Goods 2- Goods, Invoice 5-Payment for goods Retailer/ End-user Distributor Sponsor 6- Credit Repayment to the Bank 3- Payment for transaction with Distributor. Means obtained from the loan extended to Distributor by the Bank

  3. Program value added Strenghtening Sponsor’s market position • Achiveing Distributor’s loyality • Enhancing financial and purchasing strength of Distributors: • Closing Distributor financing gap between terms of payment against Sponsor and end-Buyers • Extending loans to Distributors with financial standing often below general Banking standards • Financing with minimum formalities usually required upon lending • No requirement for collateral • Attractive pricing given clean lending and scope of due diligence on Distributors

  4. Program value added cont. Limiting Sponsor’s administrative and handling costs • Sponsor is freed up from large portion of administrative burden (evalutaion of Distributor financial standing, payment monitoring and control, soft and hard collection is performed by the Bank) • In case of hard collection, costs borne by Sponsor within the process are limited solely to external tariff costs set by the Polish law • Comprehensive MIS on settlements is avaialble to Sponsor • Program administrative handling is limited only to exporting data to the Bank’s electronic system for invoices selected for financing Strenghtening Sponsor’s financial position • Sponsor does not need to extend terms of payment in order to expand sales to Distributors • Part of the risk may be shifted to the Bank (Sponsor limits the risk in case of potential significant industry problems) • Sponsor enhances its liquidity- invoices are paid by the Bank on the due date • Sponsor achieves enhanced Distributor’s payment discipline (obligations against Banks are treated by commercial entities on priority level)

  5. Bank Handlowy w Warszawie SA Trade Finance Department 16 Senatorska str. 00-923 Warsaw Distributors’ Finance Unit HeadTycjan Bieleckitycjan.bielecki@citigroup.com Phone (desk): +48 (22) 65771 94 Mobile: +48 605 788 066 fax: +48 (22) 692 21 32 Key contacts

  6. Trade Receivables Financingunder KUKE insurance policy

  7. What is a KUKE Program? = invoice discounting program with recourse limited to exclusions from insurance cover – mainly commercial disputes = program secured under KUKE insurance policy, in which the Bank is the beneficiary The insurance policy covers domestic foreign receivables receivables advance rate – 85% advance rate – 95%

  8. Program’s scheme

  9. Financing, which is an attractive alternative for traditional credit Taking over of non-payment risk of the Buyer High advance rates - 95% (foreign), 85% (domestic) of receivable value Possibility to offer competitive payment terms to the contracting parties BHW as the factor disciplines the Debtor Program’s Benefits

  10. Bank Handlowy w Warszawie SA Trade Finance Department 16 Senatorska str. 00-923 Warsaw Trade Finance (Team Leader) Magdalena Laskowska magdalena.laskowska@citigroup.com Phone (desk): +48 (22) 6929031 Mobile: +48 605980397 fax: +48 (22) 692 21 32 Key contacts

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