Trade and Supply Chain Finance Gap Summit – Trade Finance Conference of Parties Meeting 1 (TF COP) – Washington, DC

Trade and Supply Chain Finance Gap Summit | Trade Finance Conference of Parties Meeting 1 (TF COP) | 28 October 2024, IFC Headquarters in Washington, DC

In its role as the global trade finance industry body, the International Trade and Forfaiting Association (ITFA) is committed to addressing the trade finance gap, which acts as a significant barrier to economic growth and development in developing economies and which affects millions of people worldwide. We recognise the impact that resolving this issue could have, not only in unlocking opportunities for the world’s SME traders, but also in advancing our industry’s ESG agenda and meeting the UN Sustainable Development Goals (SDGs).

In order to advance this ambitious agenda, ITFA and the IFC are collaborating to hold the first Trade Finance Conference of Parties meeting (TF COP), which will take place right after annual World Bank/IMF meetings in Washington, DC. This gathering will have the ambitious aim of definitively addressing the root causes of the trade finance gap and developing tailored, practical solutions for each region that can have a real and direct impact on the ground, especially for SME traders.

What is the trade finance gap?

The global trade finance gap – defined as the shortfall between trade finance supply and demand – has been estimated at USD $2.5 trillion (source: Asian Development Bank). This gap primarily affects SME traders in Emerging Markets that do not have access to the international funding that is readily available to multinationals and trading houses. Numerous factors are driving the trade finance gap, including the lack of credit worthiness of SME exporters, non-payment risk, balance sheet constraints and banks’ derisking from emerging markets. This gap not only constrains the growth of trade, but it is also one of the biggest obstacles to achieving the UN SDGs, given trade’s direct impact on driving economic growth, creating employment and improving infrastructure.

Addressing the trade finance gap requires a collaborative solution

Through this event, ITFA aims to gather the most influential minds in the trade finance ecosystem and unite them in a shared commitment to resolve the trade finance gap once and for all. Efforts to overcome the gap have already been undertaken by the public sector and DFIs, which hold the key to overcoming risk appetite issues, but better coordination is needed to harmonise these efforts, notably between multilaterals and governments running similar programmes. This will require clear definition of roles and responsibilities, with DFIs primarily underwriting most of the risk, leveraging their political capital, while the private sector will enable solutions by providing liquidity, technology and expertise.

The Trade and Supply Chain Finance Gap Summit (TF COP)

In order to bring the parties together and kick-start this process, the Trade and Supply Chain Finance Gap Summit (TF COP) will be held on 28 October 2024, hosted by the IFC at its headquarters in Washington, DC. This event is invitation only and aims to bring together the trade finance ecosystem of each global region, including:

• Development financial institutions—global, regional, and country level;
• Commercial banks—global, regional, and country level;
• Insurance underwriters and brokers;
• Investment funds and asset managers;
• Legal firms;
• Fintechs; and
• Other industry bodies.

Objectives of the conference

TF COP will have the following practical objectives:

• Closing the trade finance gap once and for all by leveraging public and private sector efforts to develop collaborative strategies that promote sustainable growth and development in emerging markets;
• Facilitating public-private collaboration: the event will bring together DFIs, multilateral development banks and private market players – including trade finance banks, insurance companies, fintech firms and SME borrowers – to share insights and foster much-needed coordination in the trade finance sector;
• Driving innovation in trade finance: the conference breakout sessions will focus on developing and implementing innovative financial solutions that improve trade finance accessibility and efficiency. This bottom-up approach will prioritise practical inputs from practitioners in the field; and
• Establishing a sustainable network: the event is dedicated to building and maintaining a robust network of stakeholders who are committed to ongoing dialogue and collaboration to improve access to trade finance beyond the conference.

If you are interested in attending or taking part in this groundbreaking event, please email sec@itfa.org with any questions you have.