Trade Finance News, Updates & Trend Across the Globe

Are Logistic Companies Waking up to Trade Finance?

The logistics industry has a complex structure of players that enable products sourced globally to get to the last mile destination. There are freight forwarders, Regional and Global Ocean Carriers, air freight, Non Vessel owning 3PLs and others that provide a range of services.

Most logistic providers have not progressed with supply chain finance solutions. Until recently, UPS was the only game in town. Few people know that UPS bought a bank back in 2001, First International Bancorp, and got into the factoring business. Today, they focus on three finance solutions:

Source: http://spendmatters.com/tfmatters/logistic-companies-waking-trade-finance/

Hong Kong, Singapore to Collaborate on DLT Trade Finance Platform

Hong Kong’s banking regulator and de facto central bank has announced a new collaboration with Singapore aimed to digitize trade finance using distributed ledger technology (DLT).

Making the announcement today at a fintech event, the CEO of the Hong Kong Monetary Authority (HKMA), Norman Chan Tak-lam, said the joint project with the Monetary Authority of Singapore (MAS) will focus on a DLT proof-of-concept called the Hong Kong Trade Finance Platform (HKTFP).

Already having seen involvement from seven Hong Kong-based banks, the project is designed to digitize trade documents and reduce risk and fraud in the industry. Ultimately, the authorities plan the creation of a cross-border infrastructure that would serve as a bridge between HKTFP and a similar trade platform in Singapore.

Source: https://www.coindesk.com/hong-kong-singapore-to-collaborate-on-dlt-trade-finance-platform/

Corda for Cargo: R3 Inks Another Trade Finance Partnership

In its latest effort to use distributed ledgers to modernize the paper-intensive business of trade finance, R3 has agreed to work with Bolero on an electronic bill of lading service.

Announced Monday, the partnership follows R3’s pilot with Japanese financial giant Mizuho to digitize letters of credit and bills of lading, and a trade finance app developed by 11 international banks using the consortium’s Corda platform.
R3’s newest partner, the U.K.-based Bolero, already offers an electronic bill of lading and title registry, with a common legal framework, but the reach of that service will be extended by developing an oracle on Corda, the companies said.
Part of R3’s broader mission is to “help connect digital islands,” Todd McDonald, a co-founder and head of partnerships at R3, told CoinDesk.

Source: https://www.coindesk.com/corda-cargo-r3-inks-another-trade-finance-partnership/

Global Trade Finance Market Research Report 2017-2022

Bharat Book Bureau announces the addition of the report “Global Trade Finance Market Research Report 2017-2022 by Players, Regions, Product Types & Applications [https://www.bharatbook.com/business-market-research-reports-952808/global-trade-finance-players-regions-product-types-applications.html ] ” to its offering.

Summary

The global Trade Finance market is valued at XX million USD in 2016 and is expected to reach XX million USD by the end of 2022, growing at a CAGR of XX% between 2016 and 2022. This report offers an overview of the market trends, drivers, and barriers with respect to the Trade Finance market. It also provides a detailed overview of the market of different regions across United States, Europe, China, Japan, India, Southeast Asia and Others. The report categorizes Trade Finance market by By Activity, By Scope, and application. Detailed analysis of key players, along with key growth strategies adopted by them is also covered in this report on Trade Finance market is valued at XX million USD in 2016 and is expected to reach XX million USD by the end of 2022, growing at a CAGR of XX% between 2016 and 2022.

Source: https://www.marketwatch.com/story/global-trade-finance-market-research-report-2017-2022-2017-10-25-102033131

BNY Mellon becomes partner bank in ADB’s Trade Finance Program

BNY Mellon has become a partner bank in the Asian Development Bank’s (ADB) Trade Finance Program (TFP).

The agreement, made official at a signing ceremony during Sibos, covers a range of trade finance instruments, including loans and guarantees, and will allow BNY Mellon to continue its strong growth in Asian trade services by facilitating support to a wider range of customers, including small- and medium-sized enterprises (SMEs).

Backed by the ADB’s AAA credit rating, the TFP enables companies throughout Asia to engage in import and export activities through the provision of loans and guarantees by ADB’s partner banks. Since 2009, the program has supported over 9,200 SMEs across developing Asia – totaling over 13,000 transactions valued at over $25.5 billion. Sectors range from commodities and capital goods, to medical supplies and consumer goods.

Source: https://www.fx-mm.com/news/70907/bny-mellon-becomes-partner-bank-tfp/

Africa drives Access Bank’s trade finance growth

The Access Bank UK Limited, a wholly-owned subsidiary of Access Bank Plc, a Nigerian Stock Exchange-listed company, has witnessed strong growth in its trade finance business linking the Middle East region with Nigeria and other sub-Saharan markets, Jamie Simmonds, CEO of The Access Bank UK told Gulf News in an interview.

The bank which began its Dubai operations from the Dubai International Financial Centre (DIFC) in 2015 said the DIFC office has become a regional business hub for the bank, attracting trade finance deals from across the Middle East and from Asia.

The bank works on a five-year plan and matches the liability side of the balance sheet with planned asset growth. In addition to the capital raised from its parent, the liability side is significantly supported by customer balances, Simmonds said.
Source: http://gulfnews.com/business/sectors/banking/africa-drives-access-bank-s-trade-finance-growth-1.2106124

Trade finance needed to foster intra-African trade

East and southern Africa leads in intra-African trade with the highest share of between 18 and 19 percent, which reflects Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community’s (SADC) effective agenda in consolidating trade and development in Africa.
North Africa and Central Africa have the lowest share of intra-African trade of 5.3 and 2.1 percent, respectively.

This information is contained in the Trade Finance in Africa Survey Report by the African Development Bank Group published in September 2017, which tracks the changes that have occurred in the trade finance market in Africa during the period 2013-2014.

Source: https://southernafrican.news/2017/10/27/trade-finance-needed-to-foster-intra-african-trade/

De-risking in trade finance: time to act

As financial authorities express concern about de-risking in correspondent banking, a similar phenomenon is emerging in trade finance, driven by the high costs of KYC compliance.

There is a danger that some banks in some regions, such as Africa, will have difficulty connecting to the trade finance world. Banks need to collaborate to help corporate clients to connect with their customers and address the still unsatisfied demand for international trade services.

De-risking is a hot topic in the cash clearing universe as some correspondent banks withdraw from certain countries, currencies, or products to control costs and risk. At the same time, de-risking is becoming a phenomenon in the trade universe for the same reasons.

Banks’ correspondent relationships are conducted via Swift’s global network, which numbers 11,000 banks in 200 countries. Via Relationship Management Application (RMA) keys, banks can connect with each other. The RMA is a Swift-mandated filter that enables financial institutions to define which counterparties can send them FIN messages. Any unwanted traffic is blocked at the sender level, reducing the operational risks associated with handling unwanted messages and providing a first line of defence against fraud. RMA Plus, a more granular version of RMA, goes one step further by letting institutions specify which message type(s) they want to receive from, and send to, each of their counterparties.

Source: http://www.bankingtech.com/1034352/de-risking-in-trade-finance-time-to-act/

Hopes raised as first African bank joins trade finance fintech platform

South Africa’s Standard Bank has become the first African bank to join CCRManager’s digital trade finance platform, a global project to ease trade and supply chain finance distribution.

CCRManager (CCRM), a fintech firm backed by the Monetary Authority of Singapore, launched its platform earlier in the year, as previously reported by GTR.

Thirteen banks across 11 countries are already members of the platform, transacting live deals. These include Bank of China, DBS Bank, ICICI Bank, Swiss Re Corporate Solutions, UniCredit, BBVA, Yes Bank and now Standard Bank. The remaining banks are based in Japan, Hong Kong, Middle East and UK, but have not been named.

Source: https://www.gtreview.com/news/africa/hopes-raised-as-first-african-bank-joins-trade-finance-fintech-platform/

Sponsored roundtable: Assessing India’s trade finance scene

GTR: The current government of India has been taking steps to make trading and transacting simpler and easier. How do you assess the progress that’s been made on that front?

Somasekhar: In India, we have a robust foreign trade policy compared to three decades earlier. When we see the foreign trade policy, many of the items are becoming freely importable. The documentation part of the foreign trade policy has gradually been simplified over a period of time. Previously, we had around 21 to 25 documents that a customer had to submit to the authorities. Today, it has been reduced to seven or eight documents. There has been simplification of documents over the past several years in this regard.

One issue is with physical documents. Although many of the banks have completed their digitalisation process, the synchrony with customs was not available and is now being looked into. The customer gives the documents to the bank. In some cases, the bank has an interface with the customer systems, but banks in turn do not have an interface with the customs offices. This maintains the need for the physical documents to ensure that we adhere to the guidelines of customs or the regulator.

Verma: The Export Data Processing and Monitoring System (EDPMS) and Import Data Processing and Monitoring System (IDPMS) are great developments on that front. What did not happen in the last five decades has happened in the last two and a half years. It is a great change that I see. While there are a few teething issues, we believe that it is a great step in the right direction.

Somasekhar: We agree it is a positive step. Compared to 20 or 30 years back when banks were generally dealing in physical documents today, we are able to at least see them in the system once the data is uploaded by customs. We can be sure that goods have come into the country or gone out of the country. But still, there are some bottlenecks. For example, when goods are delivered in manual ports, there is no entry in the EDPMS or the IDPMS immediately but only at a later date.

Source: https://www.gtreview.com/news/asia/sponsored-roundtable-assessing-indias-trade-finance-scene/

Trade Finance News, Updates & Trends Across The World

Banks team up with IBM in trade finance blockchain

While International Business Machines (NYSE:IBM) is not typically viewed as a tech company at the bleeding edge, blockchain is one area where Big Blue is leading the way. A recent survey of company founders, executives, managers, and IT leaders pegged IBM as the overwhelming leader, a result that bodes well for IBM’s nascent blockchain business.

Source: https://www.fool.com/investing/2017/10/05/more-banks-join-ibms-blockchain-trade-finance-proj.aspx

AfDB releases second Trade Finance in Africa survey report, “Overcoming Challenges”

The African Development Bank (AfDB) has released its second Trade Finance in Africa survey report: “Trade Finance in Africa: Overcoming Challenges”. Building on the findings of the maiden 2013 survey, this new report (covering the period 2013–2014) goes even further to gauge other aspects of bank-intermediated trade finance, such as the challenges encountered by SMEs and first time trade finance clients. The report is therefore based on the combined data from the 2013 and 2015 surveys. The report’s main findings are outlined below:

The value of bank-intermediated trade finance in Africa in 2013 and 2014 is estimated at US $430 billion and US $362 billion, respectively. Put differently, banks support about one third of total trade in Africa.

Source: http://www.worldstagegroup.com/worldstagenew/index.php?active=news&newscid=38747&catid=3

Standard Chartered wraps up new trade finance partnerships

Standard Chartered has announced a new set of partnerships with TradeIX, for the digitisation of trade finance and Infor to put supply chain information on the cloud. The bank has worked with TradeIX to roll out a new open blockchain platform for trade finance, allowing corporates a “connected and secure”

Source: https://ibsintelligence.com/standard-chartered-wraps-new-trade-finance-partnerships/

Ghana concludes USD 1.3 billion trade finance deal

Ghana’s Cocoa Board has concluded a USD 1.3 billion trade finance deal, notching up a quarter-century of such deals.

Ghana Cocoa Board  – known as Cocobod – has successfully concluded the arrangement of a USD 1.3 billion pre-export receivables backed trade finance facility, marking a quarter century of such deals since the first time of going to market in 1993.

The facility followed the instruction of a range of banks, working alongside Ghana International Bank, as initial mandated lead arranger, to carry out the trade financing. Rabobank, Crédit Agricole, Natixis, Standard Bank and Sumitomo Mitsui all acted as bookrunners.

They were joined by a group of supporting banks, such as Bank of China, Tokyo-Mitsubishi UFJ Bank, Commerzbank, the Industrial and Commercial Bank of China, Rand Merchant Bank, Société Générale, ABN AMRO, Standard Chartered Bank, Barclays Bank and others as arrangers.

Source: https://www.africanlawbusiness.com/news/7640-ghana-concludes-usd-1-3-billion-trade-finance-deal

“No one tells you that trade finance can be really fun”

Invest more in young talent: when it comes to how the trade finance industry can best tackle its gender bias, Emma Clark’s message is clear. In this, the next edition of GTR’s series about inspirational women in trade finance, Sanne Wass talks to Falcon Group’s head of business development.

For Emma Clark, if things get a little too easy, they become dull. In her professional life, she heads up Falcon Group’s global business development, a role in which she often finds herself racking up the airmiles, heading out into the world to help companies expand to new export markets. She says she loves her job, because she helps “solve problems that no one else can fix”.

Source: https://www.gtreview.com/news/global/no-one-tells-you-that-trade-finance-can-be-really-fun/

Global Trade Finance Market 2017- BNP Paribas, Citigroup, HSBC

Worldwide Trade Finance Market 2017presents a widespread and fundamental study of Trade Finance industry along with the analysis of subjective aspects which will provide key business insights to the readers. Global Trade Finance Market 2017 research report offers the analytical view of the industry by studying different factors like Trade Finance market growth, consumption volume, market trends and Trade Finance industry cost structures during the forecast period from 2017 to 2022.

Trade Finance market studies the competitive landscape view of the industry. The Trade Finance report also includes development plans and policies along with manufacturing processes. The major regions involved in Trade Finance Market are (United States, EU, China, and Japan).

Global Trade Finance Market 2017- BNP Paribas, Citigroup, HSBC

Trade Finance Market Size, Share, Trends Analysis and Growth Forecast by Product Type and Application By 2022

Trade Finance Market Report covers the present scenario and the growth prospects of the Trade Finance Industry for 2017-2022. Trade Finance Market Report contains industry overview with growth analysis and futuristic cost, revenue, demand and supply data. The research report introduce incorporates analysis of definitions, classifications, application and industry chain structure. Besides this, the Trade Finance Market report also consists of development trends and key region’s development status. The report covers the market landscape and its growth prospects over the coming years.

Trade Finance Market Size, Share, Trends Analysis and Growth Forecast by Product Type and Application By 2022

2017 Rethinking Trade & Finance

With 255 responses from banks located in 98 countries, as well as various contributions from leading experts in the field, “Rethinking Trade & Finance” is the most extensive gauge of the trends and outlook of the global trade finance industry.  It aims to provide insight and analysis to help readers formulate strategy and make decisions that will advance the evolution of global trade.

The 2017 edition comes at a transformational moment in the history of trade and the global economic system. The report has its roots at the peak of the global financial crisis, and has since earned its place as a leading publication on the subject of trade, finance and economic inclusiveness.

The Report encompasses four major sections of content linked to the pillars of the Banking Commission’s strategy. It focuses on the state of the trade finance market; trade and supply chain finance; policy, advocacy and inclusiveness around global trade; and digitisation and the state of FinTech.

2017 Rethinking Trade & Finance

Access to trade finance

Engaging in world trade holds enormous potential for business yet many companies, especially small- and medium-sized enterprises (SMEs), depend on access to banking services in order to unlock new markets. Trade finance allows companies to mitigate the risks associated with importing or exporting goods and services, permitting world trade to flow in a predictable and secure manner.

Trade finance has been a key catalyst of the expansion of international trade in the past century, and bank-intermediated transactions now represent more than a third of world trade, equal to trillions of dollars each year.

More than simply maintaining our international trading system though, trade finance is essential for the future outlook of global growth. SMEs are the backbone of the global economy, representing around 95% of the world’s companies and 60% of private sector jobs, and play a great role in promoting employment and social cohesion.

The supply or shortage of trade finance hurts SMEs the most, and thus has negative knock-on effects for economies and families across the globe.

Access to trade finance

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Above news update and trends are sourced from internet and are purely meant for reading on the related subject and for information. Adam Smith Associate is not responsible for any of the content and nor it is meant for any commercial benefits.

 

Trade Finance News, Update & Trends Around The World

Bank Of America Merrill Lynch Supports Blockchain Innovation For Trade Finance

In an interview released on September 22, 2017, Peter Jameson, co-head of product management, GTS EMEA at Bank of America Merrill Lynch, spoke on the merits of blockchain technology and what it can bring to trade finance.

Jameson’s take on blockchain technology is optimistic and he thinks it can provide immediate benefits. He said, “The distributed nature of blockchain means that you could quite easily move from a place where a lot of things have to happen in sequence to a technology where a lot of the players involved in the transaction can do what they need to do all at the same time.” The so-called atomic swap, or instantaneous exchange of ownership, can easily be facilitated by blockchain-based settlement systems and executable distributed code contracts (also called smart contracts). Jameson said this capability is very powerful, given “the slow nature of some of the trade transactions today.”

Source: https://www.ethnews.com/bank-of-america-merrill-lynch-supports-blockchain-innovation-for-trade-finance

ICOs: the next goldmine for trade finance lenders?

An increasing number of non-bank lenders are looking to initial coin offerings (ICOs) as a source of funds for trade finance lending.

ICOs – also referred to as token sales – are unregulated means of crowdfunding, using cryptocurrency. In theory, through an ICO, you can raise money from anybody, anywhere in the world.

This is done by issuing digital tokens. Early backers are usually motivated by a prospective return on their investment, as a startup’s success would often translate into a higher token value.

For trade finance lenders, it offers access to an unorthodox – and, theoretically, unlimited – pool of investors in a market that is booming. In July, a report by research firm Autonomous found that startups had raised in total a record US$1.27bn in the first half of 2017 through ICOs, while the top four ICOs of the year, according to research firm Smith and Crown, have to date raised US$660mn between them.

Source: https://www.gtreview.com/news/fintech/icos-the-next-goldmine-for-trade-finance-lenders/

The C-Suite Challenges of a Trade Finance Bank

An insight into the challenges that plague the C-Suite of a bank determined to lead the trade finance business. Is Digitization the answer?

Trade Finance has been a well established and important business for Banks and Financial Institutions. Hardly any domestic or international Trade activity can take place safely and successfully without some form of trade financing, in fact as much as 80% of annual global merchandise trade is enabled through some form of trade financing. This financing can range from traditional instruments like Letters of Credit, Bank Guarantees to a more contemporary form of open account based supply chain financing.

Source: https://www.finextra.com/blogposting/14522/the-c-suite-challenges-of-a-trade-finance-bank

Trade Finance Revenues Slip $2.8 Billion At Top Banks

Top banking firms across the globe saw a $2.8 billion decline in transaction banking revenues in the first half of the year, marking a seven-year low for this area of banking, finds a new report from analysis firm Coalition.

Reports Tuesday (Sept. 19) revealed news that global transaction banking revenues jumped 4 percent year over year, hitting $18.6 billion for the first half of the year. The Americas and Asia led the increase, which also enjoyed a spike thanks to cash management revenues, which saw $11 billion in revenues in H1, a 7 percent increase and a six-year high. Coalition analysts pointed to an increase in deposit productivity.

Citigroup, HSBC and JPMorgan led the transaction banking and cash management increases, researchers noted. But the drop in trade finance reflected a decline in commodities trade finance, with corporate customers reducing activity, especially in Asia, the report found.

Source: https://www.pymnts.com/news/b2b-payments/2017/coalition-says-trade-finance-revenues-fell-2-8-billion/

Trade finance fund may be an answer as Fed, ECB prepare to unwind

As the US Federal Reserve (Fed) and the European Central Bank (ECB) prepare to unwind their easy money policy, which was in place since the financial crisis almost a decade ago, funds which are into trade finance among others may benefit.

With a rebound expected in global trade, and as banks become vary to finance companies in need of working capital, alternative sources like trade finance funds are gaining prominence even as analysts are expecting turbulent times in stock markets, which have been hitting record highs amid growing risks including geopolitical tensions and rising global debt.

“It’s a [Trade Finance] fund that will benefit from rising rates. In a rising rate scenario, equities and bonds take a beating, and this [trade finance] is an investment in the real economy,” said Doug Bitcon, head of credit strategies at Rasmala.

Souce: http://gulfnews.com/business/sectors/markets/trade-finance-fund-may-be-an-answer-as-fed-ecb-prepare-to-unwind-1.2094114

ABN Amro implements CBA trade finance front-end across global operations

Norwegian software vendor Commercial Banking Applications (CBA), today announced that ABN AMRO will be implementing the new IBAS Customer Front-End System for Trade Finance across its global operations as part of a project to offer additional functionality to customers, increase efficiency and reduce total cost of ownership.

The new IBAS front-end interfaces seamlessly with CBA’s IBAS Global Trade Finance Factory (IBAS GTF) mid- and back office solution. IBAS GTF is already being used by ABN AMRO to manage its trade finance operations across Europe, Asia Pacific and North America. The bank expects to put the new IBAS front-end into production in Q4 2017, replacing Surecomp’s allNETT solution in the Netherlands and manual processes elsewhere.

Source: https://www.finextra.com/pressarticle/70735/abn-amro-implements-cba-trade-finance-front-end-across-global-operations

Trade finance revenues hit seven-year low

Global trade finance revenues reached their lowest level in seven years, with a 5% decline year-on-year for the first half of 2017.

Total trade finance revenues for the ten largest global transaction banks (Bank of America Merrill Lynch, Barclays, BNP Paribas, CITI, Deutsche Bank, HSBC, JP Morgan, Société Générale, Standard Chartered and Wells Fargo) fell to US$2.8bn compared to US$2.9bn in the same period last year, according to the latest report by analytics company Coalition, which monitors bank activity.

Trade finance revenues comprise of traditional trade finance such as LCs as well as structured trade finance products. Structured trade finance revenue declined significantly, driven by reduced commodity trade finance activity across all regions, Coalition’s research director Eric Li tells GTR.

Source: https://www.gtreview.com/news/global/trade-finance-revenues-hit-seven-year-low/

DIGITALISATION AND TRADE FINANCE: WHAT’S NEXT?

Globalisation and the proliferation of technology have transformed the business world as we know it. But digitalisation is a priority for one industry in particular: trade finance. Greater use of technology could bring numerous benefits to the industry and even help plug the trade-finance financing gap—estimated at US$1.6 trillion by the Asian Development Bank (ADB).

As the ICC (International Chamber of Commerce) Banking Commission’s latest Global Survey on Trade Finance highlights, however, this is also a sector that has yet to fully realise the benefits of new technology. Fortunately, there is plenty that can be done to accelerate the digitalisation of the industry.

Source: https://internationalbanker.com/finance/digitalisation-trade-finance-whats-next/

AfDB, UBAF to Co-Sponsor Seminar on International Trade Finance

The African Development Bank (AfDB), in partnership with the Union de Banques Arabes et Françaises (UBAF), will co-sponsor a seminar on international trade finance in Abidjan, Côte d’Ivoire, from 3 – 5 October 2017.

Representatives of banking institutions from Côte d’Ivoire, Mali, Benin, Burkina Faso, Guinea, Togo, Senegal, Chad, Gabon and Niger will take part in this event, with the goal of improving their professional practice in international trade finance. Issues related to specific foreign trade financial products and the risks associated with managing these operations will be addressed.

This seminar will enable participants master trade finance issues, particularly documentary credit and standby letters of credit. It will also provide information on issues involved and characteristics of various trade finance products, including credit risk, conformity, communication and tools through practical case studies of traditional and structured transactions for commodities financing.

Source: https://www.newsghana.com.gh/afdb-ubaf-to-co-sponsor-seminar-on-international-trade-finance/

Commerzbank names Asia trade finance head

Deepan Dagur has been named head of trade finance and cash management, Asia, at Comerzbank.

Dagur is based in Singapore, reporting to Nick Johnson, regional board member for Asia, and March Kirchhoff, global head of trade finance and cash management.

He replaces Brigitte Volz, who took over a new role in the operational development group. He joins from ANZ, where he spent five years in various senior transaction banking roles. He previously worked with Standard Chartered, consultancy Bain and Company, investment bank Salomon Smith Barney and UBS Warburg.

Source: https://www.gtreview.com/news/on-the-move/commerzbank-names-asia-trade-finance-head/

$1.5 Trillion Trade Finance Gap Persists Despite Fintech Breakthroughs

Businesses of all sizes continue to struggle to access sufficient credit, resulting in a global trade finance gap of $1.5 trillion in 2016, according to an Asian Development Bank (ADB) Brief released on September 5. Developing Asia’s share of the trade finance gap was 40% of the global total.

In its fifth annual study, 2017 Trade Finance Gaps, Growth, and Jobs Survey, ADB quantifies market gaps for trade finance and explores their impact on growth and jobs through a survey of over 515 banks and 1,336 firms from 103 countries. While the global trade finance gap stabilized in 2016 compared to the 2015 record high of $1.6 trillion, it still translated to missed growth opportunities and job creation.

“A sizeable trade finance gap is a drag on trade, growth, and job creation,” said Steven Beck, Head of Trade Finance at ADB. “We hope the results of the survey will encourage private and public sectors to ramp up collaborative efforts to improve businesses’ access to trade finance. Our Trade Finance Program (TFP) is here to assist and address these market gaps.”

Source: https://www.finchannel.com/business/67518-1-5-trillion-trade-finance-gap-persists-despite-fintech-breakthroughs

THE TRADE FINANCE GAP STANDS AT U$1.5 TRILLION. WHAT CAN CFOS DO?

What is happening to global trade?

There are three forces driving the US$1.5 trillion trade finance gap:

  • High number of rejected trade finance applications from the Asia Pacific (APAC) region
  • High rejection rate of applications from SMEs and midcap organizations
  • Reduced lending by banks to SMEs due to perceived risk (Know-Your-Customer issues) and declining profitability in trade financing

Taking a deeper dive into the trade-finance shortfall, the ADB report says Asia and Pacific are continuing to drive this gap. The general lack of trade finance provision is due to a high number of rejected applications – against the backdrop of the largest number of proposals/requests made for trade finance (see chart below).

It’s likely to be the perceived risk of emerging market financing that is driving this shortfall.

Source: https://www.cfoinnovation.com/story/13635/trade-finance-gap-stands-u15-trillion-what-can-cfos-do?destination

 

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Above news update and trends are sourced from internet and are purely meant for reading on the related subject and for information. Adam Smith Associate is not responsible for any of the content and nor it is meant for any commercial benefits

 

Trade Finance News & Updates Around The World

Trade finance gap narrows amid minimal fintech impact

The global trade finance gap has fallen from US$1.6tn to US$1.5tn, but the impact of fintech has been minimal to date.

The latest annual survey from the Asian Development Bank (ADB) finds that many of the perennial issues persist, such as funding gaps in emerging markets, hugely disproportionate rejection rates for small businesses and a rise in non-bank lending.

But despite the industry’s zeal for digitisation, just 20% of firms reporting have used digital finance platforms. In line with global trends, peer-to-peer lending is the most-used fintech model (23%).

And while 80% of banks surveyed said fintech will reduce compliance costs and 66% said that it will enhance their ability to assess SME risk, the rejection rate of SMEs continues to rise.

Source: https://www.gtreview.com/news/global/trade-finance-gap-narrows-amid-minimal-fintech-impact/

Jamii Bora bank introduces trade finance to support entrepreneurs

Jamii Bora provides trade finance that supports enterprises and entrepreneurs by providing practical and flexible financial services that are tailor made to customers’ needs. Trade finance offers insurance Premium Financing, Overdraft facility, Letters of Credit, Bora Customs Duty Facility, LPO Financing, Invoice Discounting, Bid Bond, Performance Bond, and Advance Payment Guarantee.

Trade finance targets contractors, Suppliers, Manufacturers, Retailers, Wholesalers, Distributors, Insurance brokers, Insurance companies, importers, and exporters.

Source:  https://www.standardmedia.co.ke/article/2001253766/jamii-bora-bank-introduces-trade-finance-to-support-entrepreneurs

Trade Finance Endures, And Overcomes, Banks’ Slow-Moving Innovation

A few years ago, Sameer Sehgal, the new CEO of trade finance firm Traydstream, said he probably wouldn’t have agreed that banks are playing a role in the innovation of the industry.

But trade finance is the target for massive disruption thanks to technologies like blockchain and robotics, Sehgal told PYMNTS, and banks are finally perking up to the need for progress.

Still, it’s not enough. Recent estimates from the Asian Development Bank pegged the global trade finance gap at $1.5 trillion in 2016, with SMBs bearing the brunt of that lack of financing for their global trade initiatives. Despite efforts from the FinTech community, the gap remains, and automation is far from ubiquitous, Sehgal said.

“Trade finance, in large part, hasn’t changed, even in centuries,” he explained. “The inefficiencies of processes are glaring — humongous.”

Source: http://www.pymnts.com/news/b2b-payments/2017/traydstream-talks-trade-finance-innovation/

Global trade finance gap stands at $1.5tr in 2016: ADB

Businesses of all sizes continue to struggle to access sufficient credit, resulting in a global trade finance gap of $1.5 trillion in 2016, according to an Asian Development Bank (ADB) brief released on Tuesday.

Developing Asia’s share of the trade finance gap was 40% of the global total, the brief added. In its fifth annual study, 2017 Trade Finance Gaps, Growth, and Jobs Survey, ADB quantifies market gaps for trade finance and explores their impact on growth and jobs through a survey of over 515 banks and 1,336 firms from 103 countries.

While the global trade finance gap stabilised in 2016 compared to the 2015 record high of $1.6 trillion, it still translated into missed growth opportunities and job creation.

Source: https://tribune.com.pk/story/1498745/global-trade-finance-gap-stands-1-5tr-2016-adb/

Tunisia: UIB gets USD 10-million trade finance line from EBRD

In the framework of the implementation of its 2017-2020 development strategy supported by its activity and its offers for companies and SMEs, the “Union Internationale de banques” (UIB) announced the signing of a Trade Finance Partnership Agreement with the European Bank for Reconstruction and Development (EBRD).

This line, totaling $ 10 million (equivalent to 24.4 million dinars), is intended to cover issues of guarantees maturing up to 3 years and financing pre-export and post-import transactions.

This agreement consolidates and broadens the UIB’s partnership with EBRD inaugurated on the conclusion on June 22 of a credit line dedicated to the financing of SMEs and mid-size enterprises in the amount of € 40 million and a maturity of 7 years.

Source: https://africanmanager.com/site_eng/tunisia-uib-gets-usd-10-million-trade-finance-line-from-ebrd/?v=947d7d61cd9a

Bank of Georgia Signs $75 Million Trade Finance Facility with ADB, IFC, Citibank

Bank of Georgia has signed a $75 million one-year Club Trade Finance Facility (Club Trade Facility) arranged by Citi with the Asian Development Bank (ADB) and the International Finance Corporation (IFC), a member of the World Bank Group.

This is the fourth Club Trade Facility arranged by Citi for Bank of Georgia, which attracted several international investors during the syndication.

Bank of Georgia is a leading Georgian bank, based on total assets (33.8% market share), total loans (31.5% market share), and client deposits (31.5% market share) as of 30 June 2017.

Proceeds of this year’s Club Trade Facility will support import and export transactions for top corporate customers of Bank of Georgia, increasing the volume and value of trade transactions in Georgia’s key economic sectors, including agribusiness, transportation, and energy.

Source: https://www.finchannel.com/business/banksandservices/67411-bank-of-georgia-signs-75-million-trade-finance-facility-with-adb-ifc-citibank

A view from the ICC: Changing times call for a collaborative approach

The International Chamber of Commerce (ICC) Banking Commission’s new head of policy, Olivier Paul, discusses how the Banking Commission’s role will be critical as the trade finance industry adapts to unprecedented change.

There are some fundamental challenges ahead for trade finance: involving the regulatory landscape, the technological evolution of our industry and the vital inclusion of new non-bank sources of liquidity. These changes will involve everyone, meaning we will all need to adapt, including the ICC Banking Commission, where I recently became head of policy.

Yet I remain optimistic. For trade finance as a discipline, I am convinced that its best years are ahead of it, as long as we can embrace the future and view change as part of an evolutionary process rather than an existential threat. In fact, I see the Banking Commission’s role as vital for preparing the industry for that future, as well as being an advocate and influencer of the changes underway.

Just 20 years ago the most important role for the Banking Commission was rule-making, with advocacy a second, though still important, function. Since the 2008 financial crisis, however, these roles have been reversed, with advocacy of trade finance now the Banking Commission’s most critical function

Source: https://www.gtreview.com/news/global/commentary-changing-times-call-for-a-collaborative-approach/

White Oak Commercial Finance Provides $20MM Factoring Facility to Luxury Goods Distributor

White Oak Commercial Finance, LLC (WOCF), one of the nation’s leading financiers serving the middle market, announced today that it has provided a $20 million dollarfactoring facility to a distributor of luxury and branded apparel, accessories, handbags and watches. The proceeds will provide working capital to purchase inventory, manage account payables, and repay existing debt.

“White Oak Commercial Finance has a deep history in retail financing, having provided designers, importers and manufacturers of retail goods with access to growth and working capital for nearly 30 years,” said Robert Grbic, President and Chief Executive Officer, WOCF. “With strong historical profits and seasoned management team, this luxury goods distributor is an ideal company to finance.”

Source: http://markets.businessinsider.com/news/stocks/White-Oak-Commercial-Finance-Provides-20MM-Factoring-Facility-to-Luxury-Goods-Distributor-1002361682

Blockchain and invoice finance: an early benefit analysis

Blockchain technology is generating huge amounts of hype across a number of industries – perhaps none more so than financial services. One area of finance that has received less attention to date is invoice financing. However, as we explain in this article, blockchain has the potential to revolutionise invoice financing, for the benefit of suppliers, debtors and financial institutions alike.

To start with it will be useful to briefly summarise what blockchain actually is. For a more detailed explanation of the Blockchain technology and some of the legal considerations with its adoption, see our introduction to blockchain.

Source: https://www.lexology.com/library/detail.aspx?g=a5e664eb-041c-42cd-9511-5ad1aac70c46

 

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Above news update and trends are sourced from internet and are purely meant for reading on the related subject and for information. Adam Smith Associate is not responsible for any of the content and nor it is meant for any commercial benefits