We interview Dr.Graham Bright JP, Head of Compliance and Operation Euro Exim Bank, a financial institution with global ambitions in trade finance.

James Brown: Can you provide a brief overview of Euro Exim Bank and its core trade finance services?

Dr.Graham Bright: Euro Exim Bank Ltd, is an authorised, supervised bank, regulated by the Financial Services Regulatory Authority of St. Lucia (FSRA). We are also a member of the Caribbean Association of Banks (CAB) and the International Chamber of Commerce (ICC).

EEB has a Representative Office in London, and work with a network of agents and partners in over 200 countries supporting registered SME’s and Tier 2/3 corporates, and contractors involved in major infrastructure projects.

Our primary role is issuance of financial instruments such as:

• • Letter of Credit (LC)                                • Performance Bonds (PB)
• • Standby Letter of Credit (SBLC)        • Bank Guarantees (BG)
• • Bond facilitation   

As international trade evolves with continuing regulation and compliance, we are ever vigilant concerning due diligence, sanctions, AML, KYC, PEP’s, etc, ultimately providing safeguarded, trusted, cost effective global services.

James Brown: What motivated Euro Exim Bank to expand its operations into Africa and India, and what opportunities do these regions present for your trade finance services?

Dr.Graham Bright:  With immense opportunities in Africa, with 55 countries, the largest continental land area globally, with the population exceeding 1.4 billion, and expected to grow to 2.5 billion by 2050, our motivation is simple.

By increasing representation through our independent sales consultants throughout the continent, we are able to reach and service thousands of corporates who are faced with daily challenges, prohibiting them and disintermediating them from participating in traditional trade.

Obstacles to trade are well known and include chronic liquidity shortage, high cost of foreign exchange, lack of international trade expertise, bureaucracy, expensive infrastructure and systems and lack of trusted partners.

With imports heavily exceeding exports in many countries in Africa, difficulties in sending funds overseas, and banks being ever more cautious in terms whom they will deal, for how long and for what level of financial risk may be accepted, our bank is able to offer assistance to importers, and to future-proof our position as the leading trade finance institution as the expected boom materialises.

In terms of opportunities, we understand the challenges that working across a region currently with low economies of scale and 42 currencies may have.

Global demand is growing for critical raw materials (lithium, cobalt and zinc) used in first world electronics, and growing social demands for agriculture, pharmaceuticals, and clean energy, through partnering and foreign direct investment in infrastructure, African nations will be able to better take advantage of renewed industrial capacity, and long-term significant growth.

As traditional supply chains are affected by geopolitical issues, conflict and climate change, we see more countries eyeing cheaper diverse supply capabilities in the region.  And it is incumbent on all nations to ensure that Africa reaps the economic but also the social and trade benefits that competing in world markets can bring, in line with UN sustainable development goals.

James Brown: What are some of the key challenges Euro Exim Bank has encountered while entering the African and Indian markets, and how have you addressed these challenges?

Dr.Graham Bright:  Selling in international markets is not for the faint hearted.  Without some key principles, ambition and focus, any organisation is doomed to fail, with many bearing the financial and reputational scars that accompany such projects.

Even with the previously mentioned generic obstacles to trade, continued knowledge of all the nuances, foibles and vagaries of countries operating in such diverse markets is operationally challenging

As a Saint Lucian Bank, with a Representative office in London, we established an early model to enable us to reach contacts across the globe, and to service our target clients in all jurisdictions.

Demand for trade instruments facilitating imports has never been greater, and our model was based on four cornerstones.   

Firstly, Local people dealing with local markets

Enrolling and training sales professionals in each location enabled us to build a world class contact surface with clients, with sales agents and partners who understand and interact with the local community.

Most important is local market knowledge of customs, regulation, payment landscapes, buyers, sellers, shippers etc., all of which facilitates market penetration. We also ensured the feasibility, cost and performance of our instruments was economically appropriate and totally suited to the requirements. 

Secondly, stick to your strengths

By reducing time and effort in creating instruments, we enhanced our systems through digitisation of documents and digitalising processes, reducing the dependency on paper, wet signature and inordinate number of related documents to effect simple trades.  Our workflow-backed on-line systems rapidly position clients to take advantage of short-term opportunities, without the need for yet more parties to be involved in the transaction           

Thirdly, an expert central team for compliance, legal and operational issues

Trade can be complex, with fraudulent documents, fake goods, lack of trust, stolen goods, buyer-seller collusion, non-performance or payment. We invested in getting the right people in compliance, legal and operations, ensuring trade not only works correctly, but in accordance with the many regulations, customs, regional differences, possible currency restrictions, sanctions and checks required for each transaction.

Having local presence, being able to visit a factory or sellers, meet the people, provide their identity, produce legally binding contracts such as electronic documents with full KYC, monitoring shipments and ensuring ultimate full settlement are mandatory in today’s trade world.

And fourthly: Settlement

Exchange rates to USD are still major hurdles for many countries, with heavy exchange control, eye-watering exchange rates, delays in producing and releasing funds through domestic banks. All of these make Africa so interesting to work with, where, at time frustrating and complex, the ultimate potential gains are significant.

James Brown: How does Euro Exim Bank’s presence benefit local businesses particularly in terms of facilitating trade and financial inclusion?

Dr.Graham Bright:  Specialising in servicing the Tier 2/3 corporates markets, the major benefits of working with EEB will be the range of products dedicated to trade, and our collateral and risk reduction methodologies.

Instead of demanding 100-110% of the value of a transaction at the start of the KYC process, long before issuance, we apply a principle of appropriate collateral.  Therefore, a small company is not deprived of working capital or cash flow for the duration of the transaction, which may be up to one year.

Small companies trying to buy from abroad for the first time, would be totally restricted in bringing raw materials or consumables to their home markets, and unable to sustain locked access to cash.

We charge for our KYC process, which will provide the fundamental proofs of UBO, source of funds, financial information, directors etc, and once all checks are complete, charge buyers a fee (to issue their instruments.

This non-invasive approach is often the only way that small buyers can enter international markets, with letters of credit or guarantees for complex transactions, effectively giving buyers credit for the time of the transaction, and time to receive the goods, use them in manufacturing processes, or to sell goods locally, and then pay at the designated time.

And again, with local presence, buyers can meet representatives, rather than structure transactions without meeting the seller or organisation arranging the financial instruments on their behalf.

James Brown: In what ways is Euro Exim Bank leveraging technology to enhance its trade finance services and support its operations?

Dr.Graham Bright:  As the world of complex international trade still depends in large part on paper, non-standard documents and outdated processes, the promise of emerging technologies providing cost reduction, data and information efficiency, compatibility and interoperability has never been more hyped.

AI and blockchain, are the latest enablers of change. Not solutions in their own right, but technology driven frameworks and methodologies with capabilities, in the right hands, to massively impact the way applications work, human processes interact, and automate all important trust.

In our organisation, we recognise these technologies as the enablers they are, and the business benefits they may bring. 

Accordingly, rather than a one-hit implementation, our IT teams have taken time to understand and analyse potential impacts and are working with a policy of implementing timely small, measured adaptations to our systems.

This is vital to recognise the unique attributes of a process and how they may improve productivity, reduce bottom line costs and support economies of scale as our business grows.

Ai and machine learning have undoubted specific application in unique areas of operations, and whilst my internal systems may be enabled, are my customers ready?

How will digitising documents and digitalising my process help a Tanzanian farmer to export to Sierra Leone? How will costs be slashed as they navigate movement of goods, different customers, currencies, contractual clauses and conditions across land locked countries? Or are these technologies enabling a solution today to first-world problems where investment, time and resource are so much more plentiful than in developing and emerging markets?

In tomorrow’s world, although that may be some years away, these enablers will be so embedded in processes and part of the fabric of business that companies will not even consider them.

And in our world of fragmented international trade, until there is universal adoption of standards and methodologies, suitable regulation, human protections and adherence to ESG, we take a cautious approach.

James Brown: Looking ahead, what are Euro Exim Bank’s strategic goals for further growth and development in these regions, and how do you envision the future of trade finance evolving there?

Dr.Graham Bright:  EEB only sees growth in international trade. 

For EEB our goals are growth in numbers of sales agents, more instruments transacted, increased revenue, higher profit margins, larger international contact surface, lower internal costs, greater worldwide awareness through conferences, TV and media exposure, exhibitions and thought leadership articles.

For world markets we only see an expansion of demand, which requires productivity and greater exports with innovative instruments, alternative supply chains and structured transactions to enable efficient trade.

And above all helping business realise their ambitions to import goods economically and efficiently, helping with infrastructure projects and taking our lace as the leading trade finance bank globally.

James Brown: How does Euro Exim Bank integrate sustainability and social responsibility into its trade finance operations and what impact has this had on the communities you serve?

 Dr.Graham Bright:  We are active members of a variety of industry bodies such as the ICC, following initiatives and networks that advocate public policy development and action on sustainable trade. 

Sustainability and responsible trade remain our priority and in accordance with UN directives and our regulatory mandate, will only work with clients conforming to accepted products and services.

Our extensive global coverage which now extends to over 200 countries, and with this contact surface, our goal is to use our influence as a global trade facilitator to ensure clients have ethically produced products and operate within their stated sectors, do not exploit child or slave labour and follow accepted guidelines on production.

Similarly, we maintain a comprehensive list of prohibited and restricted goods, and operational red-flags, which, as part of our KYC processes will immediately alert us to companies seeking to operate outside accepted parameters.

Ultimately, EEB act independently with a strong CSR policy, and in accordance with best practice, take our own informed decisions regarding any engagement.

For more information visit https://euroeximbank.com