The Spanish BBVA and Tiendas ara agreed to create a financing line for suppliers under special cost conditions, in line with the commitment to reduce inequalities and build lasting relationships with local SMEs to boost national production and promote job creation. Tiendas ara is the first company to join this initiative in Colombia.
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Last year 119 companies benefited from this initiative, Of which more than 70 percent were small and medium-sized companies (SMEs), it has contributed to boosting the cash flow of suppliers and has contributed so that the economy does not stop due to the Covid-19 crisis.
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“This first line of ‘social confirming’ that we announced with Tiendas ara is a very important milestone at BBVA, since enables you to link your customer’s supply chain to sustainability goals. The ‘social confirming’ is the best way to multiply the commitment with small and medium-sized companies, the preservation and generation of employment, as well as, with the development of sustainable practices in the country, “said Mario Pardo, executive president of BBVA, who also assured that for the entity under his command sustainability is the only path that must be followed to ensure a better future for all the inhabitants of the geographies in which they operate.
Through this line The entity seeks to provide liquidity and financing alternatives to MSMEs, eliminating barriers and making the payment policies of its suppliers more flexible. This practice has promoted production, the creation of local employment and the social and economic sustainability of the communities where the company is present.
The ‘social confirming’ is a type of financing that allows providers to access in advance the collection of their invoices with better economic conditions and have the resources immediately. Thus, when a supplier issues an invoice to Tiendas ara, it can request authorization for BBVA to make an advance payment.
This type of financing is endorsed by the rating firm Vigeo Eiris, which assesses factors such as social, environmental, governmental and managerial integration with a focus on economic development, responsible investment and the creation of sustainable value from this type of placements.
According to bank spokesmen, ‘social confirming’ is part of a wide range of financial solutions (finance) that provide support to the different business partners that intervene along a production chain (supply chain), from the moment a purchase order is issued until the payment of its respective invoice.
They add that the impact of this scheme on strengthening the financial capacity of suppliers will be very relevant, since allows them to access a new line of financing at a normally much lower cost, which will result in a more robust supply chain.
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