ZIMBABWE – Zimbabwe Mercantile Exchange (ZMX) has announced a strategic partnership with Financial Securities Exchange (FINSEC) Private Markets to boost millers’ access to much-needed order finance.
FINSEC is Zimbabwe’s first alternative trading platform, licensed and regulated by the Securities and Exchange Commission of Zimbabwe (SECZIM), while ZMX is the country’s premier commodity exchange.
This collaboration aims to address cash flow challenges and unlock growth potential for maize millers across the nation.
Mr. Collen Tapfumaneyi, ZMX Chief Executive Officer emphasized the importance of maize millers, stating that they are the backbone of Zimbabwe’s food security and play a vital role in processing the staple grain for the country’s millions.
However, securing a consistent supply of grain can be a major hurdle. Supply chain disruptions due to liquidity constraints may result in reduced production and profitability for millers.
Fluctuating market prices, limited access to working capital, and the need for upfront payments often create a cash flow squeeze.
“Through this innovative partnership, FINSEC’s order finance program provides maize millers with the financial muscle to overcome these challenges. The financing model involves access to grain on credit for millers through the ZMX exchange platform,” Mr. Tapfumaneyi said.
The ZMX infrastructure will register, vet, and screen small—and large-scale milling agroprocessors, from which qualifying applications will be submitted to the liquidity provider.
Upon approval, the milling company will receive the commodity through the ZMX platform, with the liquidity provider advancing payment to commodity suppliers on behalf of the buyers. The repayments will be done as guided by the transaction details.
Mr. Tapfumaneyi further explained that millers can access credit to purchase grain directly on the ZMX exchange, thereby eliminating the need for large upfront payments and improving cash flow management.
“FINSEC offers competitive interest rates and flexible repayment plans tailored to individual business needs. The prices of grain are determined by market supply and demand conditions,” he elaborated.
ZMX acts as a secure transaction platform, ensuring transparency and mitigating risk for both millers and suppliers. With financing secured, millers can focus on their core business of producing high-quality maize products for consumers.
The financing provided under this order finance facility will be secured by outstanding receivables from various buyers, including retailers.
The credit facility’s repayment period is 30 days. This short-term financing solution is designed to address millers’ immediate cash flow needs while ensuring a secure and efficient transaction process.
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