Enhancing financial transactions through open book trading

By Bob Aston

Techfortrade Ltd held a workshop with cereals and horticulture traders from Laikipia County at Thompson Fall Lodge, Nyahururu on March 11, 2016 to explore how traders can enhance their financial transactions through use of open book trading service.

The organization has been using the service to enhance transparency and accountability in trading and build trust between farmers, traders, and buyers.

Mr. Lydiah Muya addressing the traders

Speaking during the workshop, Ms. Lydiah Muya from Techfortrade said that the organization is using Open Book Trading service to help cereals and horticulture traders to become professional, efficient, sustainable and accountable (PESA).

She said that Open Book Trading ensures that farmers receive more secure and consistent payment for their produce. In addition, traders gain predictable sources of quality produce with detailed record keeping and access to working capital finance, and buyers have visibility and transparency in their sourcing practices.

“Open Book Trade enables farmers to improve their production and access reliable markets. This ensures that farmers receive higher income,” said Ms. Muya.

She said that Techfortrade is working with medium sized traders to ensure a happy farmer, reliable intermediary, and satisfied buyer.

She said that Open Book Trade is building happy traders through enhancing efficiency in trade deals, improving professionalism, building sustainable business mechanisms and enhancing accountability mechanisms in businesses. Traders are able to receive business projections, cash flow projections, business records, link to financiers and business support.

She said that Open Book Trade is addressing challenges that come with dealing with farmers in businesses. Others include understanding farmer’s expectations in business deals, and understanding, and communicating roles and responsibilities of farmers in a business deal.

 “Open Book Trading is rebuilding trust, nurturing access to strong markets, and encouraging all those involved in the trade process to get the best and fairest price,” said Ms. Muya.

Open Book Trading deal consists of the deal plan, approval stage, finalization and deal closure. Automation of each stage of the trading deal on an online platform enables the parties involved in the transaction to know all the middle costs and prices offered at every stage. The traders and farmers can access the information from a smartphone or laptop. Techfortrade charges 2 percent for every deal made.

She said that they also provide working capital financing. This enables traders to offer farmers cash for purchase of cereals and horticulture at the point of collection rather than having to wait for the buyer to pay.

Most of the cereals and horticulture traders noted that access to finance is a major hindrance that is affecting their businesses and working with Techfortrade would solve the problem.