Credence aims to provide cross-border trade-related data to prevent SMEs from fraud

Credence, a Hong Kong-based company that provides cross-border trade-related data, is working in Bangladesh, focusing on SMEs to prevent them from trade-based fraud through providing credible data on exporters and importers.

In an interview with Jebun Nesa Alo of The Business Standard, Anindita Ghosh, founder and chief executive officer of Interlinkges Group, shared her experience of trade-based fraud in Bangladesh during her current visit to Dhaka.

Under its flagship brand Credence, the company has pioneered the first online platform for business information reports, serving over 30 banks and providing access to 350+ million counterparties globally. 

Interlinkages Group works on democratising access to finance, either through technology platforms or its consulting arm, which has consulted over $500 billion+ banks on mitigating risks and increasing cross-border trade business.

Businesses trust your approach — what makes you an expert in this space?

Credibility in trade finance isn't just theoretical — it's earned on the ground, often the hard way, meeting Corporates and SMEs, banks, institutions and regulators across emerging and developed markets. 

I think what makes us credible is that we've sat on the other side of the table. Our founding team comprises former bankers from global banks with deep experience in corporate risk, supply chain and international banking. 

We've closed deals in major financial centres of the world, underwritten billion-dollar deals and seen fraud play out in real time. During those years, I personally experienced the consequences of incomplete or outdated data — whether it was an SME's loan delayed because a single document was missing, or multimillion-dollar losses arising from sophisticated international trade frauds that traditional methods simply couldn't catch.

So we built Credence not as a tech experiment, but as a solution to what we faced daily. We built a product that understands what bankers, risk officers, importers and exporters need — whether that's verifying an SME exporter in China or assessing a buyer in Europe. 

We don't rely on static reports or outsourced cheques. We connect directly to global registries, live trade data, and proprietary research frameworks to deliver fresh, case-specific intelligence. 

Fraud today is more layered, more international. You need systems that are as dynamic as the fraudsters themselves.

How have you seen the evolution of trade-related fraud? What kinds of trade frauds are most prevalent today in emerging markets, and how do they work?

Trade-related fraud has evolved dramatically in both sophistication and structure. Trade fraud has evolved from being relatively straightforward to becoming increasingly layered and sophisticated, especially in emerging markets where enforcement and data-sharing are still catching up with the pace of trade. 

When I started trade finance two decades ago, most frauds were isolated — forged documents, fake shipments, or over-invoicing on a one-off basis. But today, we see highly coordinated fraud networks operating across jurisdictions, exploiting information gaps, regulatory mismatches, and weak verification systems. 

In emerging markets, the most common types of fraud we encounter include circular trading and over-invoicing, offshore structuring with hidden ownership, brand impersonations, fake orders and many other multi-layered frauds. 

A circular trading fraud occurs when a group of related companies trade the same goods among themselves with inflated values, creating fake trade volume to access higher credit or claim tax benefits. Often, no real goods move, just recycled paperwork. 

Frauds such as offshore structuring with hidden ownership often involve registering companies in tax havens, using a supplier's business address to mask the actual beneficiary, and thereby avoiding scrutiny in the country of address. 

We have seen brand impersonations that mislead buyers into thinking they're dealing with a trusted manufacturer, and old-style trade frauds where invoices are manipulated.

Bangladesh is rapidly growing as a global trade hub, yet incidents of trade fraud continue to rise. How exactly is Credence using data to address this, and why does it matter?

Bangladesh is deeply integrated into regional and global supply chains, particularly in garments, electronics, and light engineering.

As the country pushes for more open accounts and receivables-based trade finance, the risks also grow. Our work here shows that SMEs in Bangladesh can gain access to global markets safely, provided the due diligence is upgraded to meet global standards. 

At the same time, we must ensure that fake suppliers, circular trade structures, and invoice-based scams don't slip through. This is where data becomes a defence mechanism — it protects the banking system, the exporters, and the economy at large.

Credence aims to prevent good SMEs from being penalised for slow processes and bad actors from benefiting from systemic loopholes. Instead of relying on outdated annual reports or static KYC documents, we tap into shipment records, live global databases, and AI-driven analytics. 

We instantly flag suspicious behaviour like ghost exporters, inactive trade, and similar counterparties at the network level, which traditional methods might overlook.

This approach doesn't just prevent fraud; it changes the entire dynamic. Banks get confident in financing honest SMEs swiftly, ensuring businesses grow fairly. 

It is said that the most dangerous frauds are the ones that "look normal." Can you share a case where a seemingly clean deal turned out to be a well-camouflaged fraud?

Yes, one of the most deceptive cases we've worked on involved a borrower who submitted a proforma invoice from a well-known North American retailer to secure open account financing from a bank. The buyer had global brand recognition and a history of trade. But when we ran our checks, we discovered the invoice issuing company had been legally dissolved over a year earlier as part of a pandemic-era restructuring and bankruptcy process.

To verify, we cross-checked international shipment data. There had been no export or import activity from this entity or its affiliates since its closure. Yet, the invoice was dated well after the company ceased to exist. This raised red flags. 

It was clear that it was a potential fraud. Either the borrower was trying to use an old invoice fraudulently, or had been deceived by a third party fabricating documents. In either case, a non-existent buyer cannot place valid orders, and the bank could have been left exposed.

If the bank had relied on a legacy credit report, this wouldn't have been caught — those systems often carry data that's months or even years old. This case showed the power of live data and source-level validation.

There have been cases of 'brand impersonation" in emerging markets where fraudsters pose as a part of large MNCs and cheat unsuspecting buyers. Have you seen any such cases in your experience?

Very much so. Especially in sectors like elevators, electronics, and industrial goods, where brand trust heavily influences procurement decisions.

One particularly concerning case involved a borrower who submitted a purchase order from what appeared to be a reputable elevator manufacturer. The supplier used an English trade name that was strikingly similar to a globally recognised brand. Their emails, brochures, and documentation all seemed professional enough to convince an unsuspecting buyer.

However, when we investigated further, we found no legal or corporate linkage to the actual brand. The supplier was locally registered under a native-language name, which is common in many jurisdictions where official company names are not in English. This creates a significant loophole: fraudsters can register local names and then adopt freely chosen English trade names that mimic trusted brands and present them in international correspondence as if they're official subsidiaries or agents. 

In this case, the entity had no trade history in elevators, no brand affiliation, and had merely appropriated the identity of a known company to win export orders. For critical infrastructure products like elevators or industrial components, this kind of fraud poses serious safety risks, not just financial ones.

It's a stark reminder that due diligence must go beyond surface-level documentation and brand names. Our role is to verify registration status, legal affiliations, trade history, and ownership, especially in markets where linguistic and legal mismatches can be exploited.

You also uncovered a case involving offshore entities using Chinese addresses. What was going on there?

This is a textbook case of regulatory arbitrage. A supposed Chinese exporter submitted documentation for a financing deal. The address, contact information, and even shipping records pointed to a physical presence in mainland China.

But when we ran a corporate registry search, no such entity existed in China. Instead, the company was registered in an offshore tax haven, with no public disclosure of directors or beneficial owners.

Here's the catch: the goods were shipped directly from a manufacturer in China, but the paperwork, invoicing, and contracts were routed through the offshore company. This setup allows the offshore firm to bypass Chinese regulations and scrutiny, while the bank financing the trade may be unaware of who actually controls the transaction.

It's a deliberate setup — often used to move funds offshore, avoid taxes, or shield ownership. In this case, the bank would have had no idea who they were really dealing with.

Have you come across evidence of circular trading in your investigations?

Yes, and one case in particular stood out. We were asked to review a company claiming to be based in an East Asian jurisdiction, submitting trade documentation for import financing. The company had a real local address, and its shipments matched the HS codes on the invoices. But when we checked the corporate registry, the company didn't exist under that name.

We started tracing the buyers of this entity and found a pattern: six or seven companies repeatedly appeared as both customers and suppliers of this same entity. The goods traded were almost identical — no manufacturing, no repackaging, no transformation. It was a closed trade loop.

Digging deeper, we found shared contact numbers across two of these firms on a trading portal, and a co-filed patent from years earlier showing collaborative work between the entity and one of the "independent" buyers. These digital clues led us to suspect common control across all these entities.

Eventually, we traced the registration to an offshore jurisdiction. It was a classic circular trading setup, possibly used for over-invoicing and inflating revenue to obtain larger financing lines.