Cisco boosts financing for emerging markets

Networking colossus Cisco has announced an additional US$2 billion of short-term inventory financing to fuel growth in emerging markets.

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By  Stuart Wilson Published  December 13, 2006

Networking colossus Cisco has announced an additional US$2 billion of short-term inventory financing to fuel further growth in fast-growing emerging markets. Cisco has signed financing agreements with Citibank, GE Capital Solutions and Standard Chartered Bank. The three Cisco Capital financing partners will provide US$2 billion of short-term inventory financing capacity on an annual basis to Cisco channel partners in the Middle East, Africa, Latin America, Russia, CIS and Central and Eastern Europe. “Although many countries in the emerging markets are undergoing major social and economic transformation by implementing the most advanced technology, the lack of capital remains a formidable barrier,” explained Paul Mountford, president, emerging markets theatre at Cisco. “The breadth of financing solutions offered by Cisco Capital and its financing partners puts Cisco technology within the reach of our channel partners and will bring clear benefits, to both the end customer and the people and businesses they affect,” he added. The additional US$2 billion inventory financing is partially enabled by the US$500m short-term growth capital fund that Cisco announced last year. The vendor has also worked hard to expand the coverage of its end-user leasing programmes in emerging markets. During the last year Cisco has added seven specialist distributors in emerging markets and increased its base of certified channel partners by approximately 20%. According to Cisco, working capital is not readily available in many of the emerging markets and channel partners face long order-to-cash cycles due to a number of factors, including isolated geography and government regulations. “The financing announced provides the liquidity and working capital necessary to help our emerging market channel partners grow significantly, which is key to Cisco’s emerging markets strategy,” said David Rogan, president of Cisco Systems Capital Corporation. “Our financing partners provide both local presence and cross-border capabilities as well as an in-depth understanding of our emerging markets theatre. With nearly US$10 billion in third-party inventory-financing capability today, Cisco Capital has created and implemented a global banking infrastructure, providing significant competitive advantage for Cisco with limited financial risk to the company,” he added. Cisco has also boosted its SMB financing capabilities in emerging markets. Cisco plans to roll out SMB financing in 14 new emerging markets countries during its current fiscal year, including in Saudi Arabia.

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