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Finding the Money

Traditional sources of financing for the international jewellery industry, particularly the diamond sector, have been drying up in recent years. JNA looks at the financing options now available for the trade and the creative ways some stakeholders are funding growth.

Financing in the gem and jewellery industry occurs along the entire supply chain, literally from mine to market. Money moves through the chain to the retailer, who may finance inventory, and ultimately to their customers, who may finance an engagement ring or other piece of jewellery.

Midstream_level_of_outstanding_debt__US__billions__Leverage_level_is_the_ratio_between_total_debt_outstanding__and_cutting_and_polishing_revenues - DELGATTO DIAMOND FINANCE FUND

Traditionally, industry players have relied on bank loans and unsecured lines of credit. Over the last decade however, the gem and jewellery landscape has been shaken to its core. The major tremors reverberating through the industry – the volatile global economic climate, bankruptcies, stricter regulations regarding money laundering, and reputational concerns, among others – have caused traditional lenders to become more cautious.

During this time, there have also been major shifts in the financial services industry itself, most notably due to digital transformations. This has led to the birth of strictly online neobanks and other alternative financing with their disruptive banking technologies. Both types are successfully competing with traditional banks around the world.

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