Decentralized global trade service provider Contour has launched a fully digital trade finance network specifically designed to offer Bangladeshi SMEs support in trade finance, particularly with letter of credit (LC) processing times, with plans to onboard over 50 corporates supported by local and international banks within the next six months.
Contour’s end-to-end trade network connects SMEs, multinational companies, financiers and partners across the financial and physical supply chains, and aims to support stakeholders in moving away from traditional, paper-based processes and systems underpinning the LC process.
The decentralized, digital service addresses the specific pain points of Bangladeshi businesses with LCs, which remain one of the most popular trade payment methods in the country and which have historically been plagued with unnecessary complexity, delays and high costs.
The company is also looking at supporting Islamic transactions, for which it has seen increasing demand across Asia and the Middle East. “We are building a domestic network across Bangladesh that is Shariah compliant, recognizing that digitizing trade finance is a viable way to offer SMEs access to working capital, and a tangible way to faster economic inclusion. This is in alignment with the core principles that inform Shariah law — of transparency and equitable economic activity,” Carl Wagner, CEO of Contour, told IFN.
Earlier this year, Contour facilitated the first-ever cross-border Islamic blockchain LC transaction on its platform with Bangladesh’s City Bank, a process that only took 38 minutes. “Prime Bank, another Bangladeshi bank, harnessed our network to drive settlement times down to as low as 24 hours. We expect to see demand for more transactions of this kind, since cross-border LC processing time can take as long as 10 days,” Carl noted.
Outside of Bangladesh, Contour is looking at the growing demand for Shariah compliant transactions in the GCC, with Saudi British Bank being the newest addition to its network to meet this demand.
“Our network is built on best-in-class technologies that are designed to be interoperable and ready to deploy across complex trade networks. Beyond the immediate objective of financial inclusion that this fosters, it also significantly lowers the cost of doing business. The result is that the various counterparties in trade finance transactions are able to transact with lower fees, in adherence with Shariah law,” Carl explained.