As part of theUSAID-funded Financial Sector Program (FSP) in South Africa, Crimson experts are working with two selected financial institution partners to introduce purchase order finance (POF) to the market. POF is a type of trade finance that provides short-term working capital to businesses based on a verified purchase order or contract. It is one of the single most effective financial instruments for rapidly increasing competitiveness, sales and employment.
In June, the selected partner financial institutions issued the first POF loans, totaling 3 million Rand (approximately $450,000) under the program, to a SME company that provides shoe repairs, keys, and carpet cleaning services and a number of its more than 100 franchisee outlets. The SME company and selected franchisees will use the loan funds to purchase equipment, allowing them to fill larger customer orders and grow their businesses.