Trade Finance Global: Trade Finance Talks – Challenging Business – Trade in EDEs

Trade Finance Global (TFG) have released their latest edition of ’Trade Finance Talks’, themed: Challenging Business – Trade Finance in Developing Markets.

Free for ITFA members, this issue focuses on sustainable growth and financing challenges of SMEs and corporates in emerging and developing markets (EDEs), including a view on markets in Africa, Latin America and South East Asia, from a regulatory and compliance, specialist finance and technological perspective. 

In the countries slated to lead the world out of economic stagnation, SMEs make up more than 70% of the productive force. They face immense challenges in finding the financing they need to grow. Working capital lending rates remain above 20% pa, with asset collateral regulatory requirements of >100%. Despite operational default rates < 1%, few EDE banks take on short-term financing. Higher operating costs and a string of intermediaries keep EDE SMEs permanently in survival mode, leaving them vulnerable and unable to afford the sustainability standards they want, and we expect them to adhere to. In this edition, TFG publishes news from contributors about their efforts to address these issues.

Key features include:

• Sean Edwards, ITFA, and Olena Grynuk, SME Banking Club, show that innovative financing and distributed ledger technologies (DLT) can unlock solutions by reducing transaction costs that offset lower financing margins
• Gwen Mwaba, Afreximbank, who highlights the challenges in MENA, where only five countries have regulatory systems permitting the assignment of assets, payables and receivables financing. It is refreshing to see the bank’s new portfolio of tools and information sources supporting innovative financing for SMEs (MANSA)
• Susie Aliker, BACB, explaining where new opportunities are opening up for smaller, more agile, specialist banks with access to low cost capital, where deep knowledge of markets can be used to mitigate risks

Read the issue here.