The HSBC programme will allow ready-made garment exporter M&J Group, which supplies clothing retailers including H&M, Gap and Zara, to receive payment upon invoice acceptance, down from 90 days previously, under the buyer’s default risk coverage from HSBC. The name of the buyer has not been disclosed.
“We are extremely pleased to partner with HSBC on this first transaction under the proposition which will help us to get the benefit at both ends by catering to buyers’ increased credit terms but with early payment on a non-recourse basis,” says Salahuddin Ahmed, managing director of M&J Group.
The garment industry has been hard hit by the Covid-19 crisis. According to a recent report by consulting firm McKinsey, revenues for the sector will drop by as much as 30% in 2020 due to dramatic falls in sales. Bangladesh, the world’s second-largest garment exporter, has been particularly impacted.