Moscow Innovation Cluster Launches Blockchain Factoring

Entrepreneurs in Moscow now have access to a digital factoring service based on distributed ledger technology. The mayor’s site reports.

The service is designed for manufacturers and suppliers engaged in trade on deferred payment terms in exchange for the assignment of their receivables. Factoring enables the supplier to receive most of the payment for the goods immediately after delivery.

“The blockchain platform moves online all stages of this process—from submitting the application to signing the contract, and a factoring aggregator selects the most favorable options,” say the project developers from the Department of Entrepreneurship and the Department of Information Development.

Thanks to smart contracts, the parties to the transaction will be able to sign documents electronically at their convenience. The authenticity and immutability of the data are guaranteed by the blockchain.

“No collateral or guarantees are required. The service will help to reimburse production costs faster, bolster working capital, and plan new contracts,” noted Deputy Mayor Natalya Sergunina.

The service gives cluster participants the opportunity to mobilize funds from a bank or a factoring company while awaiting payments from the principal customer. Factoring also helps reduce risks and ensure product liquidity, the developers add.

Members of the Moscow Innovation Cluster can use the online service after registering on the i.moscow platform.

Earlier, in June 2018, a group of companies ‘Dixy’ and GPB-Factoring LLC tested their own blockchain platform for automating factoring operations.

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