Banque Saudi Fransi has signed an MoU with Shariah compliant supply chain finance digital platform Lamaa to develop and launch new services targeted at businesses across the supply chain.
Backed by oil giant Saudi Aramco (through its entrepreneurship arm) and Raed Ventures, Lamaa’s digital payables program facilitates and incentivizes large corporates to pay their SME suppliers early in exchange for a small discount. This enables enterprises to improve their margins and costs while positively supporting cashflow.
In the case of treasury not being able to fund an early payment, the fintech company will provide fund seekers with a marketplace of banks, financial institutions and asset managers to enhance the prospects of funding.
Launched in March 2021, Lamaa raised US$5.5 million in December last year. It secured a Shariah compliance certificate for its supply chain finance platform from Bahrain’s Shariyah Review Bureau in March this year, a strategic move considering it has ambitions to expand its company in Muslim jurisdictions including the UAE, Qatar and Egypt.
The Saudi company said it is already processing “millions” of invoices, without providing an exact figure.
It is understood that the firm is working on introducing Shariah compliant buy-now-pay-later solutions for large enterprises, SMEs and individuals.
Partnering with a fintech start-up underscores Banque Saudi Fransi’s digitalization ambition in line with the Kingdom’s Vision 2030. The bank has been bolstering its own technological architecture as well as digital human resources.
In April, it onboarded Backbase’s engagement banking platform to enhance its digital banking experience, particularly for its retail customers. In November last year, it joined hands with capacity building company AstroLabs to introduce its Digital Engineering Apprenticeship Program, a six-month program combining learning and application of web development key principles with hands-on project to solve real world problems.
For the first nine months of 2022, Banque Saudi Fransi realized a SAR2.67 billion (US$711.01 million) net profit, up 9% year-on-year.