El problema

In a volatile trade environment, businesses face greater pressure to understand their supply chain risks and to hold a financial cushion against supply chain shocks. An expanding body of supply chain regulation and environmental, social and sustainability (ESG) reporting practices requires importers to produce audit-ready evidence about their suppliers, often several tiers deep. Yet few reliable registries of supplier data exist, and most small suppliers are invisible to the larger manufacturers they supply. These companies have typically attempted to close the gap through two routes:

• The first is the self-declaratory questionnaire, in which suppliers are asked to report on their own practices. Supplier participation is typically low, at an industry estimate of 9 per cent, and the answers are unverified.
• The second is through a third-party rating agency, which assesses suppliers on an annual cycle. Depending on the criteria used, material risks (i.e. those that could affect a company’s financial performance) may fall outside the rating’s scope, buyers cannot see which questions a supplier answered and the data often remain unverified. Furthermore, an annual snapshot cannot keep pace with volatile trading conditions. Koaloo estimates that each data collection exercise costs roughly US$ 1,500 per supplier. Given the costs, buyers restrict coverage to a fraction of their supply base, leaving the remainder out of the picture.

Neither route concretely incentivizes or helps suppliers to improve their ESG performance or reduce their risks.

The second problem sits on the other side of the same relationship. Open account trade, in which goods are shipped before payment is received, accounts for approximately 80 per cent of global trade flows, and it leaves the supplier carrying its costs while waiting to be paid. Suppliers, particularly SMEs and firms in developing economies, tend to be excluded from affordable trade financing. Banks assess whether to finance these transactions by manually reviewing assorted documentation, from spreadsheets and emails to paper records, with limited visibility into the parties involved.

As it is not always possible to confirm that a transaction is genuine, trading companies holding legitimate purchase orders, invoices and shipment evidence, are rejected. Other applications fail for administrative reasons, such as incomplete documentation, rather than genuine credit weakness. In addition, Koaloo estimates that certain banks generally do not consider financing transactions with invoices below US$ 150,000, which excludes many SMEs. Consequently, undercapitalized suppliers cannot fund the traceability practices needed to produce the data their buyers demand.

The two problems reinforce one another. Buyers cannot engage suppliers that do not meet their environmental, sustainability and data requirements. Conversely, because these suppliers, particularly SMEs, have a perceived higher risk profile, they cannot secure the capital required to modernize their ESG practices. Over time, such suppliers risk losing their competitiveness.

La solución

Koaloo is a financial technology company whose AI-enabled supplier intelligence platform connects corporate buyers, SME suppliers and banks to address both problems. An AI performance coach works with each supplier to meet their buyer’s auditable data and performance requirements; suppliers are incentivized to participate through access to financing at more favourable rates, arranged through partnerships with banks; and the resulting supplier data, verified and auditable, is delivered to the buyer and the supplier along with actionable intelligence. Each party benefits from the participation of the other two: banks can finance more trade because suppliers are verified and compliant with their due diligence requirements; suppliers gain more affordable financing than they could obtain independently; and buyers receive audit-ready supplier data.

AI is used in two ways. The first is user coaching: a multilingual AI copilot guides suppliers step by step through submissions in their own language, explains what information is missing and why it is required and provides action plans for becoming finance-ready, linking each action to its expected financial gain.

The second is evidence verification: the system cross-checks documents, detects inconsistencies, validates data points across multiple sources and flags anomalies. The AI system first ingests information about the suppliers based on the buyer’s supplier list to establish a baseline. It then groups suppliers into tiers according to their risk level. Data is then sourced from the suppliers through approved invoices and validated by the platform. Results are stored in a consolidated audit-ready repository, from which reporting outputs aligned with the applicable requirements are generated.

Panorama general

Challenges

El impacto

Glosario