Etihad Nabs Citi To Manage Supplier Cash Flow

The United Arab Emirates is home to a booming small business market, in part due to federal officials’ encouragement for corporations to work with small- and medium-sized suppliers as the nation seeks to become less dependent on oil.

Now, New York-based Citi and Etihad Airways are looking to help support the region’s small businesses by strengthening cash flow to Etihad suppliers. The firms announced in a joint statement Sunday that they are partnering up to establish a cash flow management solution that lets Etihad pay some of its suppliers earlier than the typical 30- to 60-day window it normally takes to settle an invoice.

In a customizable supply chain finance program that the companies say meets the specific needs of the airline industry, UAE-based Etihad and Citi aim to increase and accelerate payment to suppliers through Citi.

“Our suppliers are an essential part of the success of our business,” Etihad Chief Financial Officer James Rigney said, “and we are happy to provide the tools that offer new credit and liquidity sources and accelerate their access to cash flow.”

The supply chain finance solution, Citi says, is its first in the Europe, Middle East and Africa (EMEA) region’s airline industry. It’s a program that Rigney said he hopes to encourage economic growth in the UAE. “This project is a great example of how we can work together with Citi to improve access to finance for our suppliers and encourage their development in the region to build a sustainable and vibrant city,” he said.

Reports say that the companies did not disclose the financial terms of their new partnership, nor did they name the suppliers that would benefit from faster payments.

A focus on supply chain finance for Etihad and Citi comes months after the International Chamber of Commerce met to discuss and finalize the preliminary standardized definitions of SCF as the ICC explores how to regulate and streamline the global supply chain and cash flow of its suppliers.