(1 June 2017 – Global) The International Chamber of Commerce (ICC) has highlghted the importance of reducing the huge gap of trade finance which is estimated at US$1.6 trillion globally.
“Short-term financing is an essential tool to support small business growth and sustainability, yet a growing trade finance shortfall hurts companies and countries that need it the most,” the world business organisation mentioned.
It also said that world trade depends heavily on reliable sources of financing—both long-term (for capital investments) and short-term —which is commonly referred to as ‘trade finance’ and also the basis on which a significant proportion of world trade operates.
The access to trade finance is generally recognised as a key to both the future outlook of global growth and the fulfilment of the United Nations (UN) Sustainable Development Goals (SDGs).
“A shortage of trade finance hurts small- and medium-sized enterprises (SMEs) the most, which represent around 95 per cent of the world’s companies and 60 per cent of private sector jobs,” the ICC mentioned at a press statement.
In this connection, the world business organisation urged the UN to review the trade financing gap with a ‘particular focus on possible means to reverse the on-going erosion of international correspondent banking networks.’
The ICC also assured its support to conduct the review through its banking commission.
More recently, East & Partners research into funding the global supply chain found that the world’s largest enterprises reported China as the region most challenging to fund inside their global supply chain. That is followed by Africa and South America.