The Export-Import Bank of Korea (Kexim) has signed a US$30 million revolving credit facility with Deutsche Bank to support the Korean export apparel industry, marking the first time the Korean export credit agency is entering the digital supply chain market.

Under the deal, Kexim will acquire the export receivables of Korean apparel exporters who supply clothing to Gap Inc. from Deutsche Bank, the US retailer’s key trade finance bank.

The collaboration will greatly benefit Korea’s apparel industry suppliers by supporting financing liquidity and reducing their cost of financing. As the entire supply chain finance process is digital and paperless between suppliers, their buyers, and the financial institutions supporting them, operations are made more efficient with shortened processing times.

Going forward, Kexim plans to support digital supply chain finance in earnest in order to facilitate smooth operations for suppliers and boost the competitiveness of the country’s apparel industry.

David Lynne, Deutsche Bank’s Asia-Pacific head of corporate bank and fixed income & currencies, says: “As a global leader in supply chain finance, finding new ways to make cross-border trade easier and more efficient for our clients is core to our business. Collaborating with Kexim on this groundbreaking solution, a first of its kind for an export credit agency, is a prime example of how we can support buyers with a more diversified pool of suppliers and help suppliers optimize their cash flows. Innovative approaches like these strengthen domestic industries and global supply chains simultaneously.”

Lee Jae-hong, Kexim director general, trade finance department, adds: “Healthy, efficient financial supply chains are crucial to the strength of the Korean export sector. We are keen to play a constructive role in supporting Korean exporters, directly and indirectly, in the financial supply chain and will increasingly explore opportunities to do so.”