Dear Community, we wanted to provide you with an update of Consolfreight and our pool CF4.
For the last quarter Consolfreight (CF) has been ramping up its effort to stabilize the access to liquidity and minimize the impact to our customers.
As you are aware the Bear Market and the multiple defaults in the Cefi space brought uncertainty and liquidity constraints in Defi impacting liquidity pools across multiple apps and CF4 was not the exception. We had a substantial number of redemptions, decreasing our liquidity to levels that affected the predictability of our client’s performance.
The problem with this rapid withdrawal of capital is that keeping up with binding commitments on their supply chains creates cash flow constraints impacting their repayments capabilities.
The delay we have experienced in repayments is not due to their ability, but rather to their growth and cash allocation planning that was abruptly interrupted. When liquidity is taken out without proper planning, the entire flow is affected.
We have been getting requests from the community as some of our assets have been delayed to repay. We believe that it is important to explain how Supply Chain Finance works and why delays do not mean default in most of the cases. Supply Chain Finance provides capital financing which helps through liquidity bumps. In most cases, a shortage of liquidity in a business is coming as a consequence of growth and expansion. For this reason during current conditions it will be normal to experience delays in the repayment of assets specially Trade Finance.
Also, we are glad to notify, that our CF4 pool is currently in excellent terms. This has been possible due to working closely with our clients and with our most supportive investors to weather the storm. Furthermore, we are in the process of underwriting new clients to the pool in order to keep diversifying our portfolio.
Thank you all for the continued support and patronage.
Regard on behalf of the Consolfreight team
AG and EV