𝐈𝐬𝐬𝐮𝐞 𝐢𝐧 𝐟𝐨𝐜𝐮𝐬: The global trade finance gap is growing, worsened recently by macroeconomic stresses, geopolitical tensions and regulatory compliance requirements. In 2022, it reached a record $2.5 trillion, reinforcing a growing global crisis in the ability to finance trade. It is likely that the trade finance gap will widen over the next few years, leading to greater exclusion for developing markets perceived to be high risk. The trade finance gap has a disproportionate impact on small businesses and developing countries. 𝐏𝐫𝐨𝐩𝐨𝐬𝐞𝐝 𝐒𝐨𝐥𝐮𝐭𝐢𝐨𝐧𝐬: a) Multilateral Development Banks (MDBs): MDBs play a crucial role in bridging the trust gap and have the potential to transform financial access for businesses in developing countries that face significant credit barriers. b) Microfinance, that offers small-scale loans and financial services to small businesses, plays a crucial role in bridging this financing gap by increasing access to financial resources required for exporting. Globally, there are over 10,000 microfinance institutions that process more than $120 billion in lending. c) Digital platforms and data Fintech platforms facilitate direct connections between exporters and financiers, eliminating intermediaries and streamlining the trade finance process. This enables businesses to access alternative funding sources when local banks are unable to provide loans URL: https://lnkd.in/diiN4R8e #globaltrade #commoditytrade #tradegap #innovative #smefinance
Muhammad Umair - FCA, ACMA, CGMA’s Post
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