Strategic working capital management is quietly transforming the global middle market, with top performers realising $11 million in average savings. For businesses in Central and Eastern Europe, the Middle East, and Africa (CEMEA), this represents not just a trend to follow but an opportunity to leapfrog competitors and drive transformative growth.
The second edition of the Visa Working Capital Index 2024-2025, provides a crucial roadmap for businesses in the region to harness the power of strategic working capital. This year’s Index reveals that optimising working capital is no longer just a best practice but a competitive necessity for mid-sized companies. However, realising this potential requires a fundamental shift in how businesses approach their financial operations, moving beyond simply securing capital to strategically deploying it for maximum impact.
Strategic working capital
In today’s dynamic landscape, it’s indisputable that strategic working capital management is vital to secure a competitive advantage. This is particularly the case for those companies categorised as ‘Growth Corporates’ – generating between $50 million and $1 billion in annual revenue – which together represent the engine of economic growth within a region poised for significant expansion.
Globally, top-performing Growth Corporates are reaping significant rewards. These high-performing businesses, which include 26% of those surveyed in CEMEA, have achieved average savings of $11 million in interest, inventory carrying costs, and supplier discounts—a remarkable 300% increase from 2023. This impressive performance underscores the financial power of a strategic approach. In CEMEA, this strategic focus is already evident, with 60% of Growth Corporates utilising external financing for strategic purposes, such as growth investments (29%) and navigating predictable cash flow gaps (31%).
CEMEA’s untapped potential
While CEMEA currently lags in utilising working capital solutions, the region is poised for significant transformation. Globally, working capital solutions are gaining traction, with over 80% of CFOs and Treasurers leveraging working capital solutions, a 13% year-over-year increase. However, CEMEA is projected to outpace this global trend, with a remarkable 25% year-over-year increase in utilisation among CFOs and Treasurers, to reach 85% in the coming year. This projected growth represents a compelling opportunity for businesses and financial partners in the region.
This positive momentum is already evident in CEMEA. A notable 68% of surveyed Growth Corporates deployed at least one external working capital solution in 2024, a 17.5% increase from 2023. This growing adoption, coupled with a 13% year-over-year increase in Index scores for CEMEA Growth Corporates – the second-highest improvement globally – signals a rise in both awareness and sophistication in working capital management. Furthermore, the potential for optimised working capital management to drive growth is especially evident within specific sectors: Retail & Marketplaces and Agriculture, for example, have demonstrated impressive year-over-year increases in index scores, at 26% and 19%, respectively.
Despite this progress, addressing the existing challenges in CEMEA remains crucial. A significant 40% of regional CFOs and Treasurers cited the misalignment of available solutions with their specific business needs as a major pain point. An additional 13.2% reported not using any solutions, highlighting a critical gap in access and utilisation.
The power of corporate cards
Corporate and virtual cards are rapidly gaining recognition as powerful tools for working capital optimisation, being the third-most-popular working capital solution among the top-performing organisations. Globally, these tools are linked to an 11% increase in early invoice payments, enabling businesses to secure more favourable pricing from suppliers. Beyond their utility for managing payables – as viewed by 35% of Growth Corporates globally – 41% are strategically leveraging these cards for growth initiatives.
Corporate cards, in particular, facilitate these best practices by providing real-time visibility into spending, streamlining payment processes, and enabling early payment discounts. In CEMEA, the adoption of corporate/virtual cards has surged by an impressive 139% year-over-year, with 14% now utilising these tools compared to just 5.7% in 2023. This rapid growth underscores their increasing recognition as a highly effective working capital solution within the region, with the strong correlation between high Index scores and consistent corporate/virtual card usage further validating their strategic value.
Tailored solutions
Meeting the evolving needs of CEMEA’s middle market requires a tailored and nuanced approach. Surveyed businesses in the region expressed a clear desire for personalised products and services (22.8%), better rates and terms (16.7%), expert consultation (11.8%), digital innovations (11.0%), and streamlined application processes (10.5%).
The Index reinforces the importance of addressing these needs, revealing that 7 in 10 CEMEA Growth Corporates reported that improved access to working capital directly translated into better business metrics and stronger buyer-supplier relationships, contributing to a healthier and more robust business ecosystem. Within CEMEA, the strategic deployment of working capital is particularly prevalent in the agriculture (70%) and healthcare (74%) sectors, underscoring the sector-specific nuances within the region.
