Invosoko places great emphasis on the security of your data and all financial, transaction, personal and company-related information is stored with the highest level of security.

Invosoko’s infrastructure places great emphasis on the security of funds and ownership for the investor. Thus any funds that are funnelled through the platform will sit in an account in the name of the investor with a top tier custodian bank. For GBP for example, it is Barclays.

Furthermore, once receivables have been purchased, these are assigned to  Invosoko on trust for the Funder, who is the ultimate beneficiary owner of the deed for the receivable.

When repayment from the payer comes at maturity, the funds are transferred to a reconciliation account that automatically allocates your share of the receivable back to your named account.

Thus, the Funder is the owner and has full control and title over funds or assets throughout the whole investment process. Even in the very unlikely situation that  Invosoko goes out of business, the Funder has full right and all the tools to recover funds and receive payment in full including interest. From a legal standpoint, Invosoko ’s processes are underpinned by a solid legal framework drafted with top law firms and customised to the exact flows and procedures present on the platform. For every jurisdiction in which our payers reside, the documents are further backed by legal opinions from local council ensuring enforceability, true sale, tax and arbitration or dual treaty questions are well answered for our Funders.

InvoSoko’s due diligence process is a filtering mechanism. We want our name to be synonymous with high-quality deals flow, returns delivered as promised and no unpleasant surprises. Thus we undergo thorough verifications before bringing anything before our funders. That being said, you should never rely solely on our research and should seek to perform your own due diligence and fully understand the risks before making any decisions.

Credit Risk

Supply chain finance is essentially a senior unsecured credit risk on the payer hence we analyse the payer risk based on multiple parameters including Business Risk, Size, Profitability, Leverage, Coverage, and the most important Free cash flow generation ability and Liquidity. We analyse the short-term cash needs of the business through an analysis of 1) receivables portfolio to arrive at Dilution, Delinquency and Default profile and Customer concentrations 2) any near term debt maturities and 3) Committed bank lines available. Although we finance payables of the payer, the risk of non-payment arises only if the short-term liquidity profile of the company is weak.

What we avoid is a combination of high Leverage, full credit lines, deteriorating collection profile and high customer concentration.

The data from companies are validated from Third-party systems and market feedback, preferably from existing lenders. KYC/ DD on the group structure and People behind the business is done to check any signs of high risk.

Some of the above-mentioned parameters form the basis of our Credit Rating which maps to the Moody’s corporate credit ratings for our investors to have an indication of the risk. The rating also feeds into our pricing model.

Fraud Risks

1. Fraudulent Invoicing: All the invoices on the platform are confirmed by the payer mitigating the risk of completely fraud invoices.
2. Double financing of the same invoice: most jurisdiction we work in have a need to inform the debtor for the perfection of true sale as we finance only confirmed invoices our charge is perfected and the other Financier risks losing money!
3. Risk of collusion: We take transaction history between payer and Supplier and match it with bank account statements to confirm the trading history. Our system is capable of flagging any anomalies which may require additional attention.
4. Data Manipulation by payer: We intend to work with companies which have solid operational controls and can plug into our system to transfer invoice data directly from the accounting system. We also have a provision to conduct an Audit on the invoice data by a third party.

Legal Risk

Our model is based on True Sale of invoice and is underpinned with Legal Opinions on all jurisdiction to cover clawback and re-characterisations etc.

Cross defaults, IPU and cash reserves provide additional protections against payer default.

If an obligor does not pay an invoice on the maturity date, this invoice is considered delayed. At that moment, additional interest starts accruing for the moment of repayment.  Invosoko will initiate discussions with the payer and asses the likelihood of timely repayment. In most cases, we expect to be notified of a payment delay before the maturity date.

If an Invoice continues to be delayed past the duration of the term after maturity, this Invoice is considered defaulted. In that situation, we will initiate efforts to recover the funds through legal matters.

Please note, all deals on the Invosoko platform will have a Dynamic Cash Reserve.

Dynamic Cash Reserve is an amount available to Funders to settle non-payment of Invoices by the Payer. The amount is deposited by the Payer in a segregated bank account with  Invosoko before the invoice are purchased from the Sellers. The amount would be agreed by Invosoko with Payer prior to disbursal and may be increased or decreased by  Invosoko on a monthly basis or in the period as agreed between the parties.

1. In case of non-payment of an invoice on the maturity date, Dynamic Cash Reserve would be used to repay investors on the maturity, post which ‘2’ will follow.
2. During the normal course, If the Dynamic Cash Reserve is not replenished by Payer to the required levels, Invosoko will not purchase any new receivables and the facility will terminate if the shortfall has not been cured for a continuous period of 7 days.
3. On termination, Invosoko will stop buying any new receivable and will collect on the due date any outstanding receivables. Any shortfall in payment on the maturity date will be debited from the Dynamic Cash Reserve and the remaining amount in the Dynamic Cash Reserve, if any, would be returned to the payer.