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How investing in trade finance can be profitable and help SMEs thrive

Words by World Economic Forum

Avg. 1 Min read

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The Asian Development Bank found that SMEs are disproportionately affected by the $1.7 trillion trade finance gap – the difference between the number of applications to finance companies’ participation in international operations and the number of approvals. SMEs account for 40% of such rejections, much higher than their share of applications.

  • The trade finance gap has reached $1.7 trillion and small-and medium-sized enterprises (SMEs) are disproportionately affected.

  • New technology can enable the transformation of trade finance assets into profitable capital market products.

  • A multistakeholder approach is needed to ensure SMEs have greater access to affordable trade finance.

Trade constitutes the backbone of every economy and 80-90% of global trade requires financing. Small and medium-sized enterprises (SMEs) account for around 90% of companies and more than half of the jobs worldwide according to the World Bank. It’s often those SMEs that are underserved and lack access to affordable trade finance.

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