Refinancing is an essential function for any financial service provider, as it enables financing of the lending business. However, it can be solved very differently. While institutions that belong to one group are mostly supplied with liquidity directly - and without further degrees of freedom - via the central treasury, others refinance themselves through the deposit business with (end) customers or the interbank and capital market with (often reciprocal) money market lines or capital market structures such as asset-backed securities (ABS), asset-backed commercial papers (ABCP) etc. The associated costs are significant and depend on the creditworthiness of the person seeking refinancing, e.g. backed by a rating from an international rating agency.
Especially for asset-based business models, which are characterized by cash flow inputs from the repayment of the financing and residual values, a market of so-called refinancers has established itself in Germany, which e.g. refinances contracts concluded by a leasing company with its customers - without realising a legal purchase in terms of factoring or forfaiting (with a corresponding transition in terms of accounting, risk and "management"). The refinancing module can also be used to submit and manage loan claims at the Deutsche Bundesbank (KEV procedure (bank loans - submission and administration)).
Within the afb Credit Management Solution (afb-CMS), the refinancing module offers extensive options for automated management of the above-mentioned financing, which mostly consists of tranches consisting of a large number of (leasing) contracts, and often - especially with smaller financial service providers - is processed manually on the basis of Excel.
The refinancing module is directly linked to all forms of lending business, but especially retail finance (lease), and uses partner management and, if necessary, other modules and functionalities of the afb-CMS (rule engine, e.g. for limits, interfaces to credit agencies etc.).
