Insights · Explainer · for anchors, financiers, suppliers and distributors
Who owes the money: the obligor in each of five structures
Every supply chain finance product answers one question its own way: if the money is not repaid, who owes it?
Mtaji Insights
Published 30 October 2026. 2 min read.
Written by the Mtaji Insights desk and checked against Mtaji’s product terms and publication rules before release. Editorial standards
In brief
- Under reverse factoring the anchor owes the financier. Under invoice discounting and purchase order financing the supplier does, with full recourse.
- Distributor finance is a credit facility to the distributor, with recourse to the distributor, repaid on the agreed date whether or not the stock has sold.
- Under Shariah-compliant dealer finance the distributor owes the price of goods bought on deferred payment terms.
The answer to “who owes the money?” decides how a product is priced, what security is taken and what a business agrees to when it signs. It is also the question most often blurred. These are the five structures on the platform, and the answer for each.
Reverse factoring: the anchor
The anchor sets up the program and approves its suppliers’ invoices. A financier pays an approved invoice early, and the anchor settles with the financier on the due date. The anchor carries the obligation, so the pricing reflects the anchor’s credit rather than each supplier’s.
Invoice discounting: the supplier
The supplier chooses which approved invoices to finance, and when. The anchor pays in the normal flow, but if it does not pay in full, or the amount it can collect is reduced, the supplier repurchases the invoice or pays the shortfall on demand. This is full recourse to the supplier. The anchor’s approval makes the invoice easier to fund; it does not move the obligation.
Purchase order financing: the supplier
Funding comes earlier, against a confirmed order, before the goods are made or shipped. The supplier carries the obligation, with full recourse: if delivery is not accepted, the order is canceled or the proceeds fall short, the supplier repays the advance on demand. The anchor’s letter of undertaking routes payment to the financier. It is not a guarantee.
Distributor finance: the distributor
On the anchor’s sales side, a distributor buys stock with a facility from a financier, which pays the anchor for the stock. It is a credit facility to the distributor, with recourse to the distributor, repaid on the agreed date whether or not the stock has sold. Security is usually taken over the financed stock. Access depends on several factors, including the distributor’s past performance with the anchor and its own M-Score.
Shariah-compliant dealer finance: the distributor, as buyer
Here the financier buys identified goods, owns them, and sells them to the distributor at a disclosed profit, with payment deferred. The distributor owes the price as buyer under that sale and has to pay it in full. The structure needs a financier with an Islamic window or equivalent and its own Shariah approval. Mtaji operates the platform and certifies nothing about Shariah compliance.
Why the answer comes first
A business can weigh cost, speed and convenience only once it knows which of these it is signing. That is why each program on the platform names its product, and who carries the obligation, before anyone trades.