Global Trade Finance Gap Reaches $1.6 Trillion
Sumaira FH Published September 09, 2016 | 03:25 PM
ISLAMABAD, (UrduPoint / Pakistan Point News -9th Sept,2016) : The inability of financial institutions to provide $1.6 trillion in support to buyers and sellers of goods across countries resulted in forgone growth and job creation in 2015, according to an Asian Development Bank (ADB).
Developing Asia's share of the global trade finance gap was $692 billion, said ADB in new study, "2016 Trade Finance Gaps, Growth, and Jobs Survey". The study quantifies market gaps for trade finance and explores their impact on growth and jobs through a survey of over 337 banks in 114 countries and 791 firms in 96 countries.
The annual survey is now in its fourth year.
According to the brief, trade finance gaps persist in part due to the cost and complexity of compliance with banking regulations, with 90% of surveyed banks citing anti-money laundering and know-your-client requirements as impediments to their ability to expand trade finance, especially for small businesses.
The report notes small- and medium-sized enterprises (SMEs) face the greatest obstacles in accessing affordable trade financing. Globally, 57% of trade finance requests by SMEs are rejected, against just 10% for multinational companies. High rejection rates lead many firms to turn to inefficient informal financing.
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