How can medium and small-sized businesses get their hands on trade financing?

[Victor Epand]

How can medium and small-sized businesses get their hands on trade financing?

[Alvin Adam]

Financial institutions face many obstacles when attempting to provide funding for small and medium-sized businesses (SMEs), with a lack of information being a major one.  The ability of small and medium-sized enterprises to secure financing is affected by a number of different factors. While some developed nations take a more free-market approach by providing few or no government incentives for small and medium-sized enterprise (SME) financing, others take precautions by offering guarantees or otherwise lowering the costs and risks involved. Most small and medium-sized enterprises (SMEs) in emerging economies are funded from sources outside the traditional financial sector. This is costly for the enterprise and can impede the flow of financing, thereby stifling its growth. With the global imposition of new financial regulations and banking regulations, financing for SMEs is becoming more challenging and expensive than ever before. In this context, new forms of financing enabled by technology, such as supply chain- and e-commerce-based financing, crowdfunding, and other innovations, may provide a means of escaping the information/cost trap.

[Raabiya Issac]

There are a number of different trade finance options available to small and medium-sized businesses. Banks are a common option because of the variety of trade finance products they offer, including letters of credit, export funding, and supply chain funding. Products like these can assist SMEs in mitigating dangers inherent in doing business abroad, such as not being paid by customers or having shipments delayed.  Alternative financial providers such as digital sites, invoice financing, factoring, as well as supply chain finance firms are other options for SMEs seeking trade finance.  Triterras’s FLEET platform is an online tool for facilitating trade financing for small and medium-sized enterprises. Through the platform, SMEs can quickly and safely gain access to trade finance products like letters of credit and invoice financing from a system of banks and other lenders. Even more so, Triterras’ FLEET framework utilizes blockchain technology to simplify and streamline the trade finance procedure, making it more effective for SMEs.

• This reply was modified 1 year, 10 months ago by Carin G Hansen.
• This reply was modified 1 year, 10 months ago by Carin G Hansen.
• This reply was modified 1 year, 10 months ago by Carin G Hansen.

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