Trade finance
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Trade finance in the Mekong region
Cambodia the Lao People’s Democratic Republic and Viet Nam – the so-called Mekong-3 - have experienced rapid trade growth over the last ten years. However growth could be boosted even further by improving access to trade finance such as loans and guarantees for locally owned businesses seeking to trade globally. This publication presents the results of two surveys undertaken by the IFC to determine the level of trade finance available to businesses in the Mekong region. An analysis of the data conducted by the WTO explores the potential impact of an expansion in trade finance and how this could lead to greater integration into world trade and more inclusiveness with increased participation in global supply chains by small businesses and women-owned enterprises. The publication is intended to serve as a guide to how domestic financial sectors can reorient their operations to support cross-border trade and enhanced access to global markets.
Trade finance and the compliance challenge
The availability of trade finance has become an increasingly important issue in the past few years. As international banks have become less willing to provide trade finance guarantees particularly in developing countries this has reduced the capacity of local banks to provide credit to businesses wishing to trade leading to a significant gap between the demand and supply of trade finance. Small and medium-sized enterprises have been especially hard-hit by this trade finance gap. This publication delves into the global trade finance gap and the reasons for the growing reluctance of the global financial sector to engage in this form of financing. It examines the challenges of regulatory compliance and describes the efforts of international organizations such as the World Trade Organization and the International Finance Corporation to respond to this issue. It also presents case studies of the capacity-building programmes organized by multilateral development banks which aim to improve the availability of trade finance.
Trade Finance and SMEs
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 trade finance and emphasises the importance of multilateral agencies working together.