In a trade that is facing severe liquidity crisis after the closure of Antwerp Diamond Bank and other banker’s reducing the credit, some positive steps are being taken to address the situation. A Diamond Financing Seminar was held at Davos to raise awareness about business landscape and financing need of the Diamond Industry among bankers and financial institutions.
Considering the fact that less than 5% of global financial institutions are involved in financing the diamond trade, reaching out to bankers and informing them about the industry’s operatives and financial opportunities present becomes necessary. Few leading banks like ABN Amro, Standard Chartered and State Bank of India (SBI) are among handful of institutions that finance the diamond trade on a long-term basis.
The seminar was held on the sidelines of World Economic Forum (WEF) being held in Davos and was organized by Antwerp World Diamond Centre (AWDC). Sabine Smets of ABN Amro highlighted the importance of profitability and transparency among the industry players.
Apart from discussing the industry landscape, future prospects, challenges and possibilities including diamonds as an investment product were also presented at the seminar.
To get better credit access, diamantaires will need to adopt best practices like end-to-end ERP systems to track inventory movements, accountability, compliance with changing regulations including standardized KYC norms, IFRS compliant auditing and complete ownership and transparency, as voiced by several bankers lately. The problem is not the unavailability of credit supply but the fallen trust of financial institutions over the diamond industry in general owing to defaults by some players, opaque operations and critical issues like money laundering in some cases.