PI Global Investments

Green trade finance goes digital to help SMEs run efficiently and sustainably

Easier access to green financing 

Leveraging the existing digital data available on Doxa Connex, Kimly can also access green and sustainable trade financing from UOB bank without additional paper documents.

Mr Edmund Ng, Doxa’s co-founder and chief executive officer, shares that the platform makes use of blockchain technology to help verify documents. “This way, Doxa Connex provides financial institutions with a single source of data truth and greater transparency.” 

For example, once a PO is generated, the data will be encrypted in the blockchain and become part of an immutable database, which means it cannot change, be changed, or deleted. 

“There is no way for anyone to delete or manipulate the data that’s already in the blockchain, and this makes it easy to prove that the transaction in question is genuine,” says Mr Ng, 46.

Construction companies will be able to validate their suppliers’ or subcontractors’ invoices on Doxa Connex, and its trade financing requests will be automatically triggered and forwarded to UOB. This cuts the need for the company to send physical copies of the relevant documents to UOB branches for verification.

Ms Ng Poh Yee, UOB’s managing director and head of Corporate Trade Sales and Financial Supply Chain Management, adds: “From a financing standpoint, we need the same evidences of order, delivery and acceptance of the underlying commercial contract between our client and their suppliers.”

Before it was digitalised, clients would have to collate and submit these documents from various internal and external parties to UOB for verification. The bank also requires a copy of the same documents.

“This duplication means the paper flow is actually doubled as UOB would have had to separately and individually verify the authenticity of each transaction, which adds to the processing time to avail the financing required,” says Ms Ng, 50.

“But with Doxa Connex, we no longer have to do so as our client can easily push the relevant supporting trade documents digitally to us for financing, making the process secure, swift, and cost effective.”

When it comes to financing in the construction industry, suppliers, contractors and subcontractors are often inadequately served, says Ms Ng. 

“Especially for green and sustainable trade finance, most of them lack the necessary framework to prove that they meet certain sustainability standards. They may also not be fully aware of the financing options available to them,” she says.

The use of a single source of truth in Doxa Connex to verify supporting documents addresses this issue, allowing UOB to finance not just Kimly, but also all the stakeholders along Kimly’s value chain.

With sustainability being a key focus for UOB Group, the bank launched its Green and Sustainable Trade Finance Framework last year. It was designed to provide businesses with a clear guide on assessing eligible green activities and recognised industry certifications within targeted sectors.

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