RESEARCH AND ANALYSIS
Trade Finance and SMEs: Bridging the gaps in provision
Trade finance plays a key role in helping developing countries participate in global trade. Easing the supply of credit in regions where trade potential is the greatest could have a big impact in helping small businesses grow and in supporting the development of the poorest countries. This publication takes a detailed look at this issue and emphasises the importance of multilateral agencies working together in response.
The availability of finance is essential for a healthy trading system. Today, up to 80 per cent of global trade is supported by some sort of financing or credit insurance. However, there are significant gaps in provision and therefore many companies cannot access the financial tools they need.
Following the 2008-09 economic crisis, small and medium-sized enterprises (SMEs) have found it increasingly difficult to access this vital form of credit. The poorer the country, the greater the challenge. The lack of adequate trade finance is particularly acute in Africa and developing Asia.
This publication provides a set of recommendations for addressing the gap in trade finance provision. This includes bolstering existing trade finance programmes, enhancing the trading capacity of developing countries and improving communication between all parties involved in trade finance.
Published in 2016