Islamic trade finance took one step toward embracing technology to increase efficiency in the latest transaction by the IsDB’s International Islamic Trade Finance Corporation (ITFC) involving a bank, exporter, trader and carrier.
The Shariah compliant trade finance transaction facilitated by the ITFC involved a cotton shipment originating from Burkina Faso and shipped by logistics company CMA CGM Group from the Port of Lome in Togo. The deal was a cash against documents transaction between cotton textile producer Sofitex and agricultural company Louis Dreyfus Company, using an electronic bill of lading (E-BL) issued by the CMA CGM Group through the Bolero digital trade finance platform.
The process traditionally takes weeks as all parties work with physical documentation and documentary collection delays can take up to 21 days, but Bolero’s digital platform executed the encrypted exchange of documents rapidly across Burkina Faso, Togo, Saudi Arabia and Switzerland.
“Facilitating this online trade transaction for our partners in Burkina Faso marks a crucial milestone in the digitalization of trade in Africa, and we can expect to see improved efficiency across the entire trade cycle,” Abou Jallow, the general manager of operations at the ITFC, said. “By embracing technology through platforms such as Bolero’s, we can ensure greater visibility, transparency, accountability and control in the trade of strategic commodities such as cotton.”
Marc Bourdon, the senior vice-president of the commercial and agencies network at the CMA CGM Group, said: “This is an important step for the maritime industry. E-BLs facilitate documentation flow between carriers, shippers and banks. With the global sanitary situation, it has become obvious that we must speed up the transition to electronic transmission of international sales documentation.”
The ITFC is no stranger to digitalization initiatives. In December last year, it launched LC Confirmation, its new letter of credit (LC) product which was debuted by Bangladesh’s City Bank in a cross-border LC transaction using blockchain technology.