Cisco Capital Slates $2B in Financing for Channel Partners in Emerging Markets

By Jessica Davis  |  Posted 2006-12-13 Email Print this article Print

The financial arm of the networking equipment giant is offering more financing and extending the payback time for these partners due to tight capital conditions and the time it takes for new equipment to arrive at its destination.

Cisco Capital has expanded its short-term inventory financing for emerging regions to $2 billion through agreements with financial partners Citibank, General Electric's GE Capital Solutions and Standard Chartered Bank.

The new funds will offer short-term financing to Cisco channel partners in the Middle East, Africa, Latin America, Russia and the Commonwealth of Independent states, and Central and Eastern Europe, said the networking vendor, based in San Jose, Calif.

According to David Rogan, president of Cisco Systems Capital, the new funds extend the time for channel partners to repay Cisco from 30 days to 60 or 90 days.

"In some cases it took 30 or more days just for the equipment to get through customs and to the end users," he said. "And in some of these emerging countries there is not a significant amount of capital or liquidity, and that constraint ended up constraining our growth rate as well."

Sales to emerging markets are crucial to Cisco's overall growth, Rogan said. In fact, some of the emerging market countries are expected to become billion-dollar markets for Cisco in the next three years. These regions are investing in initial infrastructure build-out, and Cisco said sales in these markets have grown 40 percent year over year.

Cisco's channel goes vertical. To read more, click here.

Cisco hopes the new financing will give it a competitive edge in those emerging countries where money is tight. Rogan admitted that pricing is likely one of the issues in those markets, and pointed to Cisco's leasing program that offers customers the option to put equipment on a payment program.

Rogan said that the $2 billion is not a top limit: Cisco plans to continue to expand the program, both financially and geographically. Other regions the company is looking at include Vietnam, the Philippines and Indonesia. In addition, Rogan said Cisco plans to expand further into China and India.

Click here to view exclusive channel research from Amazon Consulting.

Cisco's $2 billion in new financing is partially made possible by the $500 million short-term growth capital fund Cisco announced in 2005.

Over the last year Cisco has added seven specialty distributors focused on expanding regional coverage in emerging markets and has increased its base of channel partners in those regions by about 20 percent.

In total, Cisco Capital has nearly $10 billion in third-party inventory financing capability today, the company said.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at


Submit a Comment

Loading Comments...

Thanks for your registration, follow us on our social networks to keep up-to-date