The World Economic Forum has warned that the global trade finance gap could reach $2.5 trillion by 2025 as large numbers of funding applications continue to be rejected due to lack of collateral or information from the requesting entities.
More than half (60%) of the banks that responded to a survey conducted by the Asian Development Bank just prior to the outbreak of the coronavirus pandemic expected an increase in the volume of trade finance requested by importers and exporters but subsequently rejected.
Governments around the world have taken a variety of steps to support trade finance since the start of the pandemic, including increasing the capacity of export credit agencies, expanding working capital programmes and introducing new facilities to support exporters and importers – particularly SMEs.
These steps alone will not close the trade finance gap.
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