Development and commercialisation of an innovative commodity trade and finance platform

In the wake of COVID-19, most Small-and-Medium Commodity Traders (SMCTs) will need cost effective trade finance to support the recovery of both imports and exports \[[ICC][0]\]. However, increasing regulatory requirements has led to increasing costs to fulfil legal, risk management and administrative requirements for CTF transactions. Therefore, banks have reduced their finance networks to the major commodity traders and their corporate clients concentrating the market into their hands. The processes involved in carrying out CTF transactions are manual, paper-based and require the work of professional lawyers, making it uneconomically viable for most SMCT's to gain access to smaller size loans which they require.

Digital blockchain trade finance platforms have been recently launched in collaboration with banks to help the generic trade finance sector. These platforms facilitate the necessary trade finance workflows, between only the participating banks and their existing corporate clients. Due to the high costs involved in the manual due-diligence, risk-management and legal processes, major barriers for most SME's accessing CTF are still unresolved.

Through this 3-months industrial research project we, Satoshi Systems Ltd are developing Phlo; an innovative R3 Corda blockchain-based machine learning platform which allows all members of the commodity trading supply chain to carry out the essential workflows needed to facilitate CTF transactions. Phlo will create a level playing field for SMEs, providing process transparency, risk reduction, credit when needed, and the rapid, low-cost facilitation of CTF transactions.

[0]: https://iccwbo.org/content/uploads/sites/3/2020/05/2020-10ways-governments-sos.pdf