(26 January 2026 – Global) Trade finance providers continue to struggling closing the wide US$2.5 trillion gap in financing importers and exporters require to conduct trade, holding back economic growth according to the Asian Development Bank (ADB).
Active supply chain diversification measures implemented to manage damaging US tariff uncertainty will continue to be hamstrung by perennial working capital constraints until the trade finance gap narrows and borne disproportionately by SMEs seeking to expand into new markets.
SMEs are impacted the most adversely by working capital constraints and challenges accessing suitable trade financing facilities. Notably the percentage of businesses whose trade finance requests are rejected fell to 41 percent compared to 45 percent in 2023 however. Developing regions such as Africa have been most acutely affected as lenders allocate their balance sheet to more profitable products. Compliance and onboarding gripes are also a key pain point identified.
The trade finance gap represents global unmet demand, specifically the difference between requests and approvals for financing to support imports and exports. The value of the trade finance gap is estimated by the ADB every two years and captures up to 40 percent of global trade.
A gradual growth in alternative currencies used for trade has been recorded, including the Chinese Renminbi, with a growing need for the use of local currencies in particular.
“Though the figure is unchanged since 2023, the persistently large gap represents a lost opportunity to drive global growth and development. The gap has also widened since 2021, when it stood at US$1.7 trillion. Without the financing to back trade, imports, and exports, we’re just not going to be able to realise the kind of growth and development that we can from trade” commented ADB Head of Trade and Supply Chain Finance, Steven Beck.
“The high demand for trade finance overshadows the availability of assets, underscoring an urgent requirement for additional investment and liquidity to address this disparity” comments Casterman Advisory Founder and Managing Director, Andre Casterman.
“Through digitalisation, banks can enhance credit and financial crime risk management and unlock revenue opportunities for both SMEs and themselves. Mid- to senior-level professionals in banks must be aware of these evolving challenges and opportunities. They need robust risk assessment frameworks, particularly concerning the authenticity and security of digital transactions and tokenised assets.”