EBRD achieved the transformation by facilitating three test letters of credit on the digital trade finance network Contour
The trial took place with QNB ALAHLI, one of Egypt’s largest commercial banks, acting as issuing bank and the CargoX Platform used for electronic presentation of documents.
The process of issuing and confirming letters of credit often involves large volumes of paper-based documentation, generating high administrative costs, inefficiencies, and barriers to financing.
Contour uses decentralized technology to streamline the process by digitizing letters of credit.
The process reduces the paperwork involved in trade transactions, significantly shortening the settlement time of trade documents.
“We are proud to be part of the digital transformation in Egypt by facilitating these test transactions by QNB ALAHLI on Contour,” said Heike Harmgart, EBRD Managing Director, Southern and Eastern Mediterranean
This trial included a test of Contour’s integration with the CargoX Platform for Blockchain Document Transfer.
A Slovenian company, CargoX has been selected by the Egyptian customs authorities as the official digital courier service provider.
The EBRD has designated digitalization as one of three main priorities under its current five-year Strategic and Capital Framework.
As part of this approach, the EBRD is partnering with digital solution providers and banks to support digitalization in trade finance in and beyond the economies where it operates.
In addition, the EBRD is working with the International Chamber of Commerce to advance the adoption of legal frameworks to enable digital trade and trade finance.
Through the program, the EBRD provides guarantees to international confirming banks and short-term loans to selected banks and factoring companies for on-lending to local exporters, importers, and distributors.
The TFP currently includes more than 100 partner banks in 30 economies where the EBRD invests and more than 800 confirming banks worldwide.
Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the EBRD has invested more than €8.7 billion in 145 projects in the country.