THANKSTO
Dr.MarcAuboin
ÁngelBustos
ParvaizDalal
TackoBaroFall
EgidioGermanetti
SergioRodriguez
AzzizzaLarsen
NathalieLouat
StephenKay
LauraFarrellSmith
PriyamvadaSingh
MakikoToyoda
TFGEDITORIAL& MARKETINGTEAM
BrianCanup
CarterHoffman
DuyguKarakuzu
KirtanaMahendran
DeepeshPatel
NigelTeoh
©TradeFinanceTalksisownedandproduced byTFGPublishingLtd(t/aTradeFinanceGlobal)
Copyright©2024 AllRightsReserved Nopartof thispublicationmaybereproducedinwholeor partwithoutpermissionfromthepublisher The viewsexpressedinTradeFinanceTalksare thoseoftherespectivecontributorsandarenot necessarilysharedbyTradeFinanceGlobal
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DeepeshPatel EditorialDirector TradeFinanceGlobal(TFG)
BrianCanup AssistantEditor TradeFinanceGlobal(TFG)
Bankingonwomen: HowIFCsupports femaleentrepreneurs ininternationaltrade
IFC’swhitepaper,“BankingonWomenWhoTrade AcrossBorders”,highlightstheneedforgender equalityininternationaltrade&tradefinance.
Women’sparticipation ininternationaltradeis substantiallylowerthan theirmalecounterparts
Onlyabout15%ofexporting firmsworldwideareled bywomen,andthese entrepreneursfacehigher tradebarriersandlimited accesstofinance,which furtherrestrictstheirbusiness growthandparticipation ininternationalmarkets.
Toaddressthesedisparities, theInternationalFinance Corporation(IFC)has beenactivelyinvolvedin programmesdesignedto empowerwomenintrade Onenotableinitiativeisthe BankingonWomenGlobal TradeFinanceProgram(BOWGTFP),launchedinmid-2019, whichfocusesonproviding financialsupportandresources towomen-ownedbusinesses
involvedininternational trade Sinceitslaunch,the programmehasfacilitatedover $260millionintransactions. Throughtheseefforts,theIFC aimstoenhancewomen’s participationinglobaltrade, therebypromotinggender equityandeconomicinclusivity
InIFC’swhitepaper,“Banking onWomenWhoTradeAcross Borders”,theIFChighlightsthe needforgenderequalityin internationaltradeandtrade financewhileemphasising itsimportanceforsustainable developmentinemerging markets.
Barriersacrossborders: majorchallengesfor accesstofinance
Oftenwhenwehearabout tradebarriers,wethinkof government-imposed measuresliketariffsor quotasthatimpedethefree flowofgoodsfromonenation toanother.
Formanysmallandmedium entrepreneurs–particularly women–therealityisthat therealbarrierstointernational tradehaveverylittletodowith intergovernmentalposturing andtheystrikewellbefore goodscomeanywherenear aborder
Alltoooftenthetrueculprit isalackoffinancialsupport.
Accessingglobalmarkets usuallyrequireslonger paymentterms,anddealing withdifferentpartiesindifferent
Multilateralsatwork: HowIFCissupportingtradeandsupply chainfinanceinemergingmarkets
jurisdictions.Thereforetrade financebecomesanecessity forfirmstostayinbusiness andgrow
Yet,despitetherelativelysafe natureoftradefinanceasa whole,duetoitsshort-term tenor,trackablenatureand oftenself-liquidatingcharacter, accessingsuchfinancing provesdifficultformany businesses,especiallythose helmedbywomen entrepreneurs.
Onereasonisthelevelof collateralrequiredbyfinanciers
InAfrica,90%ofcommercial bankscitetheabsenceof collateralastheprimaryreason whytradefinanceapplications arerejected Unsurprisingly,this disproportionatelyimpacts newerandsmallerbusinesses suchaswomen-ledenterprises, thatsimplydon’thavealarge enoughassetbasetouseas collateralagainstaloan.
Thenatureoftradefinancing costsfurtherincentivises
financierstopursuelarger tickettradersinlieuofsmaller players,sincetheirfixedcosts canbespreadacrossalarger commissionsize,leadingto moreprofitforthefinanciers.
Onaggregate,theaveragesize ofaletterofcreditinAfricais around$2million,afigurethat isheavilyimpactedbylarger traders,sincesmallerfirms simplydon’tneedthismuch money.Theaveragesize ofageneral-purposeloanis $1,250,$21,500,and$133,000, respectivelyformicro,small, andmedium-sized enterprises(MSME)
Thesefinancialfiguresstill don’ttouchonthecomplexity ofapplyingfortradefinance, whichcanrequireupto100 documentsandspecific knowledge
Thechallengesfacedbywomenentrepreneursinaccessingtradefinance, basedoninterviewswith70womeninBrazil,60inKenya,and85inNigeria (1=leastimportant,5=mostimportant)
Highinterestorhigh feesfortradefinance
Timeconsuming bureaucracywithbanks
Highordifficultcollateral requirementfrombanks
Lackofknowledge, trainingoreducationon tradefinanceinstruments
Lackofcreditscore
Excessiveinformation requirementsfrombanks
ThesechallengesarecommonforallSMEsrequiringtradefinance,asidentifiedin theIFC-WorldTradeOrganization2022and2023reports.However,thesebarriers aremoreprominentandpotentiallyhaveagreaterimpactforwomen-led business,asthereisaconvergenceofobstaclesforwomentoparticipateintrade
Source:IFCinterviewswithwomenentrepeneursinBrazil,Kenya,andNigeria
Taketheexampleofamicroenterprisethatneedsamere $1,250infinancingtogrow. Thetimeandcostsofgathering anyrequireddocumentsand employingstaffwith therequisiteskillstosubmit anapplicationforfunding caneatawayatnearlyall ofthefinancingthatthe firmhopestoreceive.
Whybother?
Andthisisn’tjustatheoretical problem TheIFC’sresearch showsthattheseissues standinthewayofreal businesseseveryday.
Casestudies:Brazil, Kenya,andNigeria
TheIFCinterviewedfemale entrepreneursandfinancial institutionsinBrazil,Kenya, andNigeriatotryandbetter understandtheactual challengeswomen-owned firmsfaceinaccessing tradefinance
Theresultsrevealaseriesof shareddifficulties,underscoring gender-specificbarriersin globaltradefinancing
InBrazil,themainbarrieris thestringentrequirementfor collateralthatbanksimpose onwomen-ledbusinesses.This challengeisnotuniquetoBrazil butisalsoprevalentinKenya andNigeria,whereitissimilarly citedasamajorimpediment
Womenentrepreneursin thesecountriesstruggleto meetthesedemands,which
oftenexceedtheiravailable resources,effectivelylocking themoutofnecessaryfinancial servicestoexpandtheir tradeactivities.
OneBrazilianbusinesswoman said,“Someofusfoundourway indigitalbanksastheyareless bureaucraticthanthe traditionalones.”
Additionally,thecostof accessingtradefinance–manifestedthroughhigh interestratesorfees–is anothersignificantbarrier, particularlyhighlightedasthe topchallengeinKenya.These financialconstraintsreflect broader,non-gender-based disparitiesthatpervadethe economiclandscapesof thesecountries
AnentrepreneurfromKenya said,“Iwastoldyouneedto bringcollateral–atitle. However,thispieceoflandwas notveryvaluable,butIbrought it Then,Ineedtobringan [appraiser]whichisabigcost ThenwastoldIneedtobringin documentationformycar.The amountofmoneyforthecar valuationwasalsohigh The sadthingis,Istillwon’tbegiven themoney!Ihavespentso muchofmyownmoney,and theystillwon’t[lend]ittome”
Addingtothesestructural andfinancialchallengesis aknowledgegapamong womenentrepreneurs regardingtradefinance instruments
Thislackofunderstanding, alongsideinadequate trainingoreducationonhow tonavigatethesefinancial tools,pointstoacriticalneed fortailoredcapacity-building initiatives
ANigerianbusinesswoman said,“Irelymoreonfriends, familyande-commerce platformsforfinancingmy business,asIhavelimited understandingontrade financeproductsoffered bybanks.”
Thecollectiveexperiences fromBrazil,Kenya,andNigeria highlightsystemicissues inaccessingtradefinance, criticalforintegrating womenintoglobalmarkets yetlargelyunattainable duetothesebarriers
H a t
canprovidesolutionstomake itmorefeasibleandaccessible forsmaller,women-led organisationstogetthe financingtheyneedtoaccess globalmarketsandgrowtheir businesses
Thechallenges areidentified, butwhatnext?
Recognisingthebarriersthat manysmaller,women-led businessesfacewhensecuring tradefinance,theIFChas outlinedavarietyof recommendations
Tohelpwomenentrepreneurs ingeneralwholackphysical assetsforcollateral,theIFC willstrengthenitsBankingon
totradefinancefor womenentrepreneurs inemergingmarkets. IFCwillalsofacilitatemore trainingprogrammes forfinancialinstitutions andwomenSMEstoshare knowledgeontradefinance aswellaswarehouse receiptsfinancingand supplychainfinance
NathalieLouat,GlobalDirector, TradeandSupplyChain Finance,IFCsaid,“IFCis committedtofurther strengtheningtheexisting WomeninTradeprogram underitsGlobalTradeFinance Programtosupportmore women-ledbusinessesin tradeinemergingmarkets. Tounderscoreour commitment,wearelaunching theWomeninTradeNetwork
Fromafinancialperspective, theIFC’sreporthighlights theimportanceofblended finance,whichseeksto combinepublic,private,and philanthropicfundstoreduce thefinancialrisksassociated withlendingtowomen-led businessesintradethatany oneinvestormusttakeon.
Byprovidingconcessional funding,lendingtothese entrepreneurswillbeamore attractiveprospectforbanks andinvestors,ideallyincreasing liquidityintheecosystem.
Onthestrategicside,theIFC isstrengtheningitsimpact throughstrategicpartnerships withotherdevelopment agencies.Thesecollaborations leverageexternalexpertisein gender-focusedprogrammes andwillhelptosupportthe specificneedsofwomen inbusiness
Thechallengesoutlinedin IFC’sBankingonWomen WhoTradeAcrossBorders whitepaperareveryrealfor womenworldwide,butthey arenotinsurmountable
TheIFChasnumeroussuccess storiesfromwomenacross differentcountriesand industries,beatingtheodds withtheirrespectiveinitiatives ToseemoreaboutIFC’s successstories,visitIFC’s WomeninTradewebsite.
MakikoToyoda GlobalHeadoftheGlobalTrade FinanceandGlobalSupply ChainFinancePrograms InternationalFinance Corporation(IFC)
TackoBaroFall WaemuHeadFinancialInstitutions AndInternationalOrganizations Ecobank
Empowermentthrough trade:IFCandEcobank ontacklingthegender
IFC’swhitepaper“BankingonWomenWhoTrade AcrossBorders”,speakstothegenderdisparity thatstillexistsintheinternationaltradespace, particularlyinemergingmarkets.
Only15%ofexportingfirmsareledbywomen.
Thisfinding,fromtheIFC’s whitepaper“Bankingon WomenWhoTradeAcross Borders”,speakstothegender disparitythatstillexistsinthe internationaltradespace, particularlyinemergingmarkets.
Tolearnmoreaboutthe challengesthatwomen entrepreneursfacewhen tradingacrossborders
andsomeoftheinitiativesin placetooffersupport,Trade FinanceGlobal(TFG)spokewith MakikoToyoda,GlobalHeadof theGlobalTradeFinanceand GlobalSupplyChainFinance ProgramsattheInternational FinanceCorporation(IFC), andTackoBaroFall,Waemu HeadFinancialInstitutions AndInternationalOrganizations atEcobank.
Multilateralsatwork: HowIFCissupportingtradeandsupply chainfinanceinemergingmarkets
Thechallengesfacing womenintradeare daunting
Womenintradefacesignificant challengesthathindertheir abilitytoparticipatefullyand equallyintheglobalmarket
Toyodasaid,“Inemerging markets,manywomenface difficultcollateralrequirements, theyoftendon'thaveacredit history,andthereisahighcost oftradefinancetransactions”
Thesehighcostsassociated withtradefinancetransactions canbedisproportionately burdensomeforwomen-led firms,whichmightalreadybe operatingwiththinnermargins comparedtotheirmale counterparts.
Furthermore,thecomplexity oftradefinanceproducts themselvesposesasubstantial obstacle,particularlyfor thosewhoarenotwellversedinnavigatingthe financiallandscape,which disproportionatelyincludes womenduetohistoricaland systemiceducationaland professionalgapsinfinance.
Thesechallengescollectively contributetoadiscouraging environmentforwomen entrepreneursintrade,limiting theirgrowthopportunitiesand reducingtheircompetitive edgeintheglobalmarketplace.
Recognisingthesechallenges, organisationsliketheIFCand Ecobankareworkingtoput initiativesandprogrammes inplacetohelpchange
thestatusquo BaroFallsaid, “Itisimperativethatwesupport women.Wesimplycannot ignorethemastheyconstitute asignificantnumberofour populationandintegralto theentrepreneuriallandscape”
Changingthestatus quoforgenderequality intrade
Severalinitiativesand programsareactively addressingthechallenges facedbywomenintrade, spearheadedbyinstitutions liketheIFCandEcobank. TheIFChaslaunchedefforts throughitsGlobalTrade FinanceProgram(GTFP), whichhasbeeninstrumental insupportingfinancial institutionsinemergingmarkets
tofacilitateaccessto globalmarkets.Anotable partofthisinitiativeisthe collaborationwiththeGoldman SachsFoundationtoprovide pricediscountsforwomen importersandexporters, aimingtoincreasethefinancial participationofwomenintrade.
morewomen-related transactions.Somebanks, likeEcobank,haveembraced thismindsetandlaunched programstothatendapositivesignthatchangeis coming Forexample,Ellevate, agenderfinancingprogram launchedbyEcobank,is
Despitetheseefforts,however, thevolumeoftransactions involvingwomenremains disappointinglylow.
Toyodasaid,“Since2019,we haveonlybooked$260million intransactionsforwomen-led businesses Whilethatisnot asmallnumber,overthesame periodwebookedatotalof $40billionintradefinance transactions,whichmeans thatonly0.65%ofthetotal valuewenttowomen
Thisisnotacceptable”
Tohelpovercomethisdisparity, theGTFPhasbeenpartnering withfinancialinstitutionsto providetrainingprograms ontheimportanceofgender awarenesswiththeultimate aimofhelpingprovide incentivesforbankstobook
designedtoprovideboth financialandnon-financial supporttofemalebusiness owners,ensuringaholistic approachtosupporting womenentrepreneurs.
BaroFallsaid,“Werecognise threebasicneeds:theaccess tocredit,theaccessto markets,andthecapabilities development.”
Theprogrammeleverageskey partnershipswithnon-profit organisations,government agencies,anddevelopment institutionstoenhanceits offeringsandreducethe needfortraditionalcollateral requirements,makingfinance moreaccessibletowomen entrepreneurs.
Together,theseinitiatives representarobusteffortto integratewomenmorefullyinto theglobaltradeenvironment byreducingfinancialbarriers andincreasingtheirbusiness capacitiesthroughstrategic supportandtrainingprograms
Withgainingmomentum, itistimetobeginputting togetherinnovativesolutions fortheyearsahead.
Levellingthegender playingfieldinthe yearstocome
Thefutureinnovationsin improvingaccesstofinancefor womenintradeinvolveablend ofdigitalsolutionsandstrategic partnerships,oneofwhichisthe increasedadoptionofdigital platformsandtoolsthat enhancefinancialinclusion.
BaroFallsaid,“AtEcobank,we havelaunchedaTradeHub platformtohelpourwomen clientsaccessmarketsin around33countries,wherethey willbeabletosellandbuytheir goodsandservices.”
Thisplatformispartofa broadermovementtowards digitalisationthatwas
acceleratedbytheCOVID-19 pandemic,leadingtogreater adoptionofdigitalfinancial services.Suchdigitalsolutions areespeciallybeneficialfor women,whoaremore likelytoengageinonline transactionsandcanbenefit frommobilemoneypayment servicesthatfacilitateeasier andmoreaccessibletrade transactions.
Anotherapproachonthe horizonistheuseofblended finance,whichcombines concessionalfundsfrom donorsordevelopmentfinance institutionswithcommercial capital,aimingtomotivate stakeholderstocommit togender-inclusive
developmentgoals Theidea istouseblendedfinanceasa tooltoencouragebanksand otherfinancialinstitutionsto altertheirtraditionalfinancing models,whichoftenexclude womenduetostringent collateralandcredithistory requirements
Furthermore,there'sapush formultilateraldevelopment banks(MDBs)toplayamore coordinatedroleinpromoting accesstotradefinance forwomen
Toyodasaid,“Wedon'thave ataskforceforgendertrade, whichisprettyembarrassing. Inthefuture,thisissomething thatwecanproposetohave
Multilateralsatwork: HowIFCissupportingtradeandsupply chainfinanceinemergingmarkets
underMDB’sworkinggroups sothatwecanthinkabout collectiveactions.”
Suchataskforcewould potentiallyadvocatefor regulatorychangestosupport women-ownedbusinesses, amplifyingtheimpactof financialanddevelopmental initiatives.
Thesefuturedirections signifyaholisticapproach toaddressingthesystemic barriersthatwomenfacein trade,emphasisingtherole oftechnology,innovative financingstructures,and collaborativeeffortsamong globalfinancialinstitutions anddevelopmentagencies
AttheInternationalFinanceCorporation’s(IFC) GlobalTradePartnersMeeting,thisroomfull offemaleinternationaltradeexpertsdiscussed thechallengesthatfemaleentrepreneursface intheglobaltrademarketandstrategiesfor changingthestatusquo.
Inaroomfulloftradefinanceprofessionals,onlyone hadaclientbasecomprisedofatleast50%women.
Onlyone.
Genderequalityremainsa pressingissueininternational trade,wheresignificantbarriers hinderwomen’seconomic opportunitiesandimpacttheir abilitytocompeteandthrive inglobalmarkets
AttheInternationalFinance Corporation’s(IFC)Global TradePartnersMeeting,this roomfulloffemaleinternational tradeexpertsdiscussedthe challengesthatwomen entrepreneursfaceintheglobal trademarketandstrategies forchangingthestatusquo.
Theroundtablediscussion revealedinsightsintothe obstaclesfacedbywomen, aswellasinnovativestrategies thatcouldenhancetheir participationintrade.
Thestatusquo:
Female-ledbusinesses struggletoaccess tradefinance
Multilateralsatwork: HowIFCissupportingtradeandsupply chainfinanceinemergingmarkets
Oneparticipantinthe roundtablesaid,“Collateral requirementsfortradefinance areamajorbarriertotrade financeforwomen.InAfrica,but alsobeyond,anoverwhelming
burdensomefor womenandSMEs. ”
Thesebarriersmanifest differentlyacrossregions, reflectingvaryingcultural, economic,andregulatory environments.Inemerging markets,particularlyinAfrica, legalandsocietalnormsfurther
majorityofcommercialbanks saidtheabsenceofcollateralis theprimaryreasonforrejecting tradefinanceapplications”
Onemajorobstaclefor women-ledbusinesses accessingtradefinance isthestringentcollateral requirementsimposedby financialinstitutions.Dueto thesmalleraveragescaleof thebusinessestheyrun,women oftenlacktherequisiteassets tomeetthesedemands,which disproportionatelyaffectstheir abilitytosecuretradefinance.
Moreover,thecomplexityof documentationprocessesin tradefinanceposesanother formidablechallenge,witha singletransactionsometimes requiringupto100documents
Anotherparticipantsaid, “Iwasshockedtolearnthat 50to60%ofthetransaction costscomefromthat 100-documentprocess Thatdocumentation processisreally,really
complicatewomen’s accesstoresources andfinancialservices
Forinstance,womenoften encountersignificant genderbias,asfinancial institutionsperceivethem ashigherriskthantheir malecounterparts
Thisperceptionpersists despiteevidencesuggesting thatwomen-ledfirmsoften havelowernon-performing assetratios Thisissue partiallystemsfromalack ofinformationonbothsides ofapotentialtransaction.
Oneparticipantsaid,“There’s aninformationdeficit:Women andSMEsoftendon’tknowhow tradefinanceproductswork, whilebanksandfinanciersare missingdataaboutwomen, theircreditworthiness,andtheir businesshistory.These informationasymmetries createaperceptionofrisk whichleadstohesitancyand somereluctance”
Anotheradded,“Weneed tostarttrackingdataaround women-ledbusinessesinorder
toseewhatthetrajectories ofthesecompaniesare. Oncewestarthaving datatheindustrywillbe betterabletofocuson overcomingthebarriers”
Theimpactofthesebarriers onwomen’seconomic activitiesisprofound.Limited accesstotradefinance directlyconstrainswomen entrepreneurs’abilityto expandtheirbusinesses,enter newmarkets,andincrease theireconomicfootprint.
Thesefinancialconstraints alsohavebroadereconomic implications,reducingpotential jobcreationandeconomic growthintheircommunities. Oneparticipantinthe roundtablesaid,“Ifwomen participatedintheeconomy atthesamerateasmen, economicoutputcouldrise byasmuchasathird”
Thescaleofthisimpact warrantsinvestmentinto innovativefinancialsolutions tohelppromotegender inclusionintrade.
Thechallengesfacedbywomenentrepreneursinaccessingtradefinance,basedon interviewswith70womeninBrazil,60inKenya,and85inNigeria (1=leastimportant,5=mostimportant)
Highinterestorhigh feesfortradefinance
Timeconsuming bureaucracywithbanks
Highordifficultcollateral requirementfrombanks
Lackofknowledge,trainingor educationontradefinance instruments
Lackofcreditscore
Excessiveinformation requirementsfrombanks
ThesechallengesarecommonforallSMEsrequiringtradefinance,asidentifiedintheIFC-WorldTrade Organization2022and2023reports.However,thesebarriersaremoreprominentandpotentiallyhaveagreater impactforwomen-ledbusiness,asthereisaconvergenceofobstaclesforwomentoparticipateintrade
Source:IFCinterviewswithwomenentrepeneursinBrazil,Kenya,andNigeria
Innovativefinancial solutionsforgenderbalancedtrade
Thefinancialworldis constantlyevolving,andthe latestroundinvolves approachesthataredesigned totackletraditionalgender barriers,providingmore tailoredandinclusivefinancial solutionsforwomen entrepreneurs
Onesignificantinnovationis thedevelopmentoffinancial productsthatdonotrelyon traditionalcollateralbut instead,usealternativeforms ofcollateralormethodsto evaluatecreditworthiness
Oneparticipantsaid,“There needstobeamoveawayfrom collateralbecausethese womenareoftenmorein astartupposition Thebig questionthenbecomes:how canyouassessrisk?Weneed awholenewwayofthinking.”
Someinstitutionsare exploringtheuseofreceivables ascollateral,allowingwomen whomaynotownproperty orothertraditionalassets tostillaccessfunding.
Programmesofferingblended finance–anewapproachthat combinesconcessionaland commercialfinance–are anotherpromisinginitiative. Theycanprovidefinancial resourcesaswellasvaluable trainingandmentorship, addressingboththecapital andknowledgegapsthat manywomenface.
Thesesolutions,aspartof abroaderefforttotransform howfinanciersinteractwith women-ledbusinesses,signify ashifttowardsmoreinclusive financingthataddresses theuniquechallenges facedbywomen.
Manyofthesefinancial innovations,whichenhance thevisibilityofwomen-led
businesses,arebeingmade possiblebytechnological advancements,suchasdigital platformsandbigdata.
Digitalplatformsandthe integrationofbigdataanalytics cantransformhowwomen accesstradefinanceby increasingaccessibilitywhile reducingcosts,whichwill benefitwomen,whooften runsmalleroperationsand canbemoreimpactedby hightransactioncosts.
Oneroundtableparticipant said,“Technologyishelping ustoknowourcustomers moreintimatelyandto betterunderstandthecredit historyofotherwiseinformal enterprises.
Digitisationoftrade financecanlowerthecost ofdocumentationandmake Technologyand digitalisationas catalystsofchange
womenentrepreneursvisible whichiskey.”
Anotheradded,“Onegreat wayfortechnologytohelp istoenterincreditandrisk informationthatisn’tordinar available.Soitcansubstitute orenhanceoraddtocredit information.”
Byleveragingdataanalytics andartificialintelligence, financialinstitutionscangain previouslyunavailableinsigh intothetransactionhistories andfinancialbehaviours ofwomenentrepreneurs
Thesetechnological advancementsrepresent ashifttowardsamore inclusivefinancialsystemthat recognisesandcaterstothe needsofwomenentrepreneurs, enablingthemtocompete moreeffectivelyglobally
Technology,however,can onlygosofar.Formanywomen entrepreneurs,buildingstrong networksthatcanadvocatefor theiruniqueneedsonalarger scaleisalsoneedtohave astrongimpact
Equalopportunities throughstrong networksandadvocacy
Manybusinessesarefuelled bythepoweroftheir professionalnetworks.
Forwomenentrepreneurs seekingtoenternewmarkets, havingsupportivenetworks andadvocacygroupscan providecriticalplatforms
tradeenvironment.
Networkscanprovide amechanismforwomento collectivelyaddresscommo barrierssuchasaccessto finance,legalrestrictions, ormarketentrychallenges, enablingthemtotrade moreeffectively.
Oneparticipantsaid, “Wereallythinkthatwe needtofindawaytoreach thesewomen,offerthem opportunitiesbecausethey willdriveproductivity,they willsupporteconomicgrowt
Regularengagementandth sharingofknowledgeand bestpracticeswillhelpbuild acontinuouslearning environmentthatsupports women’sgrowthandaddres theirimmediatechallenges
Advocacygroupscanalsop acrucialrolebyhighlighting thespecificneedsofwomen intrade,advocatingforpolic changes,andpushingfor
Multilateralsatwork: HowIFCissupportingtradeandsupply chainfinanceinemergingmarkets
Settingthegoals fortheyearahead
Continuingtopromote educationandstandardisation willbemajorstepsonthe roadtowardspromoting genderequalityintradein theyearahead.
Formany,however,basic educationmayhavethe
Onthestandardisationside, developingaclearideaofwhat itmeanstobeawomen-led businesswillallowinstitutions tocollectbetterdata,whichwill providecriticalinsightsintothe challengeswomenfaceand theprogressbeingmadeto overcomethem.
Anotherparticipantsaid, “Weneedtogetaclear definitionofwhatawoman-led
runningrealbusinesses. “Maybethegoalistofind50 womenbetweennowandJuly,” oneparticipantsaid
“Wedon’tneedtoknow everythingaboutthemyet Justfind50womenwhoown enterpriseswhomightbe candidatesforyourtrade programs Findoutwheretheir situationtodaysowecanlearn theimpact andfigureouthow
NathalieLouat
DirectorofTrade&
SupplyChainFinance InternationalFinance Corporation(IFC)
onBankingonWomen WhoTradeAcross Borders
DeepeshPatelinterviewedNathalieLouatatthe IFCGlobalTradePartnersMeetinginBarcelona.
TheInternationalFinance Corporation,amemberofthe WorldBankGroup,hasreleased awhitepaper,“Bankingon WomenWhoTradeAcross Borders”,exploringthegender disparityininternationaltrade
Tolearnmoreaboutthis researchanditsimplications forwomen-ledtraders,Trade FinanceGlobal(TFG)spokewith NathalieLouat,GlobalDirector ofTradeandSupplyChain FinanceattheIFC
Multilateralsatwork: HowIFCissupportingtradeandsupply chainfinanceinemergingmarkets
Lackofresearchcreates alackofunderstanding
TheIFChasbeenactivein financingbusinessesledby womenfor15years,financing $4.5billionofloanstothese businesses.Theorganisation alsohasaGlobalTradeFinance Program(GTFP)aimedat reducingthetradefinancegap, whichhasfinanced$100billion worthoftradesinceits inception.
Louatsaid,“Atsomepoint,we broughtourheadstogetherand thoughtthatweshouldfocuson supportingmorewomen-led exportersandimporters That's wheretheideaofthisprogram waslaunched”
Fiveyearsafteritslaunch,the IFChadfinanced$260million oftransactionsforwomen-led
businesses.Whilethatisalarge figure,itpalesincomparisonto the$40billionoftotalfinancing theorganisationprovidedfor thesameproductclassover thesametimeperiod
WhenIFCtriedtouncoverthe reasonswhytheywereunable toreachmorewomen-led businesses,theyfoundthere simplywasnotmuch researchavailable
Louatsaid,“Wefoundalot ofresearchonwhytrade financeisimportantfortrade Wefoundlotsofresearchon whyitisimportanttosupport SMEs,specifically But therewasnoresearchon women-ledbusinesses.”
Withthatrealisation,the BankingonWomenWho TradeAcrossBorders whitepaperwasborn
TheBankingonWomen WhoTradeAcross Borderswhitepaper
Thewhitepaperexplores someofthebarriersthat disproportionatelyimpact womenintrade,including culturalbarriersandlack offinancialliteracyandit ultimatelydiscoversthatthe barriersareonboththe demandandsupplyside.
Financialinstitutionstend toperceivethatwomen-led businessesbearagreaterrisk profile,likelybecausetheylack specificknowledgeofthese businesses,duetotheir generallyshorterhistory
Further,90%ofcommercial bankrespondentsidentifiedthe absenceofcollateralasthe primaryreasonforrejecting tradefinanceapplications.
Louatsaid,“Thelackof collateralisaproblemin generalforSMEswhoare tryingtoaccessfinancing, butwefoundthatthewomen businesseslacktheassetsto provideascollateral”
Onthedemandside, companiesseekingfinancing tendtohavelessfinancial experienceandasmaller network
Louatadded,“Tradefinance iscomplex.Itrequiresalot ofdocumentation.It'salittle distractingforwomentohave tofocusontheseadministrative aspectswhenthey'relooking togrowtheirbusiness”
However,itisnotjustthese characteristicsthathinder accesstofinance.Trade financealsohasstructural barriersthatpreventwomen fromjoiningtheindustry,but
therearemeasuresthat governmentsandfinancial institutionscantaketohelp changethenarrative
Blendedcollaboration drivesbusinessgrowth forwomenintrade
Financialinstitutionsshould explorespecificsolutionstolook outforwomenwhofacethose challengesandputprograms inplacetohelpthemdevelop theirbusinesses
Louatsaid,“Wewouldlikebanks tofocusonfacilitatingaccess tocreditforwomen-led businesses Wewantthemto consideravarietyofpayment optionsandtoofferavariety oftradesolutionstothese women-ownedbusinesses.”
Multilateraldevelopment bankscanalsosupportthese businessesbyenhancing financialliteracyandworking withbankstosimplifycomplex tradefinanceinstruments. Promotingblendedfinance maybeanotherwaytocatalyse interestandhelpdrivesupport forwomen-ledbusinesses
Blendedfinancecombines fundsfromdonorsor developmentfinance institutionswithcommercial capital,providinganincentive forbankstolookforways tobettersupportwomen entrepreneursaccess globalmarkets.
Manyoftheseinnovative approacheswillbe strengthenedbygovernment supportandinstitutionsthat canunderpinthechanges needed,suchascreditbureaus andcollateralregistries.
Louatsaid,“Withmorecredit bureaus,morecollateral registries,financierswillbe abletoprovidefinancingwith lessneedforformalcollateral, whichthesewomenoften don'thaveaccessto.”
Therehavebeensuccessful casestudiesfortheseideas, providingaroadmapfor futureimplementation acrossdifferentregions
Louatsaid,“InVietnam,itis clearthatoncewegotthe governmentandtheprivate sectortocollaborate,the bankswereabletopickup onthosecommercially attractiveopportunities andworkonfocusingon thesesegmentstoincrease accesstotradefinancefor women-ledenterprises
Multilateralsatwork: HowIFCissupportingtradeandsupply chainfinanceinemergingmarkets
“Whatwehaveseenisthat thewomen,inturn,areable totakeadvantageofthese opportunitiesandreally growtheirbusinesses”
Tolearnmoreaboutthe casestudyinVietnamand thefactorsimpactingwomen intrade,readtheIFCsfull whitepaperhere
AzzizzaLarsen
SeniorVicePresident,Lenders
Markettomobilise:
Creditinsurancecanhelpbridgethisgapby improvingaccesstotradefinanceandfacilitating betterfinancingtermsforwomen-ledfirms.
TheAsianDevelopmentBank (ADB)reportedthatthetrade financegapexpandedto $2.5trillionin2023,up from$17trillionin2022
Despiteeffortstomitigatethis growth,thegapcontinuesto widen,posingchallengesfor globaltrade,particularlyin emergingeconomies
Businessesarenavigating anincreasinglyvolatile environment,withsignificant geopoliticaland geo-economicshifts
Over40%oftheglobal populationwillparticipatein electionsin2024,likelyresulting infurtherpoliticalunrestand policyuncertainty
Multilateralsatwork: HowIFCissupportingtradeandsupply chainfinanceinemergingmarkets
Since2005,thefrequency anddurationofconflictshave doubled,furthercomplicating thetradelandscape
Theprioritisationof globalisationandbusinessfriendlypoliciesiswaning, givingwaytoregionalisation andprotectionism
Climateeventsexacerbate foodinsecurityandwater scarcity,promptingmore governmentstoadopt protectionistmeasures.
Concurrently,recordinflation andpersistentlyhighinterest ratesaremakingborrowing andtradefinancemorecostly.
Todiscusshowmultilateral developmentbankscan helpandtherolethat creditinsurersplay, TradeFinanceGlobal(TFG)
spokewithAzzizzaLarsen, SeniorVicePresident,Lenders SolutionsGroupLeaderand CreditSpecialtiesGrowth LeaderforNorthAmerica, andStephenKay,Managing Director,StructuredCredit andPoliticalRiskatMarsh, attheInternationalFinance Corporation’s(IFC)Global TradePartnersMeeting,held inBarcelona,7-9May2024.
Multilateralsupport
fortradeandsupply chainfinance
Multilateraldevelopmentbanks (MDBs)arecrucialinsupporting tradeandsupplychainfinance programs,especiallyduring suchturbulenttimes.
Larsensaid,“Weseemany lenders,regardlessofhow muchtheywanttosupport
therealeconomy,turning totraditionalriskassessment methods–likecollateraland balancesheets–insteadof otherperformancemeasures
Thislimitshowmuch financingmany businessescanreceive anddisproportionately impactsmicro,small,and mediumenterprises(MSMEs)”
Larsenhighlightedthe importanceoffacilitating accesstofinancingas emergingmarketsseekto bolsterresilienceagainst climatechangeandpromote economicdevelopment forwomen,low-income households,andMSMEs.
Thesesectorsare oftenthehardesthitby economicvolatilityandrequire targetedsupporttothrive
Roleofprivate creditinsurers
Privatecreditinsurersplay apivotalroleinmobilising financetosupporttrade banks,particularlyin emergingmarkets.
Kayexplainedthattheprivate creditinsuranceindustryoften partnerswithMDBstoventure intohigh-riskmarkets
Hesaid,“Thecreditinsurance marketfollowsmultilateral developmentbanksinto developingmarkets, leveragingthepreferred creditorstatusthatthese institutionscanoffer.This arrangementbenefitsinsurers throughthemultilateral’s diligenceandscrutiny,which ismorecomprehensivethan whatprivatebanksorclients canundertake”
Thiscollaborationallows entitiesliketheInternational FinanceCorporation(IFC)to mobilisecommercialinsurers’ risk-takingcapacity
Hesaid,“Thisisreflectedin IFC’sgreattrackrecordof negligiblelossesunblemished over20+yearsofsupporting trade,includingthelast15 yearswithrisksharingfrom private marketcreditinsurance”
Bydoingso,theysupporttrade inhigh-demand,challenging markets,maintaintradeflows, andkeepemergingeconomies connected Kaynotedthatthis involvementiscrucialfor
maintainingaccessto criticalimportssuchas foodandmedicines
Managinglimit pressuresand
resourceallocation
MDBsoftenfacelimit pressuresduetotheir extensiveengagements withemergingmarketbanks, whichcanincludeguarantees fortradefinance,equity holdings,andmediumtolong-termcredit
Sharingtheseriskswithprivate creditinsurersallowsMDBsto expandtheirsupportwithout overextendingtheirresources
“Privatecreditinsurers typicallydotheirowncredit reviewofemergingmarket issuingbankswhenapproving supportforIFC,”Kaysaid, “buttheyalsorelyonIFC’s extensivereviewand screeningofthesenames”
Thelimitsprovidedbyprivate insurerpartnersareadditive toIFC’sowncreditlimits, enhancingIFC’scapacityto supporttradeforspecificbanks.
Localbanksindifficult jurisdictionsbenefitfromthis cover,whichmightotherwise beunavailable
Privatemarketcredit insurershavealonghistory ofmobilisingtradecapitalin emergingmarketsbyinsuring risksforcommercialbanks
Thissupporthasevolved fromshort-termtradefinance instrumentslikecross-border lettersofcredit(LCs)andtrade advancestoavarietyoftrade financestructures.
Bankscanoptimisecapitaland expandlendinglimitsinvarious Independentsupport fromprivatecredit insurers
jurisdictionsbypartnering withcreditinsurersandbrokers.
Thispartnershiphasallowed creditinsurerstodevelop deepexpertiseinunderwriting emergingmarketrisksand establishastrongtrackrecord ofpayingclaims.
Kaysaid,“Bankshavebeen abletonotonlyfreeuplending limitsbutalsooptimizecapital inmanyjurisdictionsenabling themtolendmoreortake additionalrisk.Asaresult, creditinsurershavedeveloped deeppoolsofexpertisein underwritingemerging marketrisksandaproven trackrecordofpayingclaims, buttheirappetitevaries dependingonthecountry ofriskandcreditworthiness ofthecounterparty,amongst otherfactors”
However,theirappetitefor riskvariesdependingonthe countryandthecounterparty’s creditworthiness.Involatileor economicallychallenged countries,multilateral supportremainscrucial
Bridgingthegender gapintradefinance
AccordingtotheIFC’sreport “BankingonWomenWhoTrad AcrossBorders,”women-led firmsaccountforonly15%of exportingbusinessesglobally.
Creditinsurancecanhelp bridgethisgapbyimproving accesstotradefinanceand facilitatingbetterfinancing termsforwomen-ledfirms
Multilateralsatwork: HowIFCissupportingtradeandsupply chainfinanceinemergingmarkets
Larsensaid,“Creditinsurance canhelpwomen-led businessesfeelmoreconfident inexporting,knowingtheycan mitigatenon-paymentrisk”
Creditinsurancecanhelp women-ledbusinessesmake moreinformeddecisionsby providingaccesstovaluable marketintelligence,suchas buyerpaymenttermsand countryriskanalysis
Thisinformationempowers womenentrepreneursto expandtheirexportactivities andplayamoresignificant roleintheglobaleconomy
However,whilecreditinsurance canbepartofthesolution,it isnotapanacea.Thecurrent focusinunderwritinghas predominantlybeenonthe environmentalaspectofESG, withlessemphasison socialfactors
Theindustryshouldconsider usingthecriteriadeveloped forenvironmentalrisksasa blueprinttosupportsocial factors,suchaswomen-led businesses
Shiftingthenarrativetoinclude moresocialconsiderationsin underwritingcanhelpbetter supportthesebusinesses andtheriskstheyundertake
BypartneringwithMDBs andsupportingbusinesses, particularlyMSMEsand women-ledfirms,theindustry canmobilisethenecessary resourcestofosterglobal tradegrowth
Thiscollaborativeapproach ensuresthattradeflows continue,eveninthemost challengingenvironments, ultimatelysupportingeconomic developmentandresilience inemergingeconomies
MakikoToyoda GlobalHeadoftheGlobalTrade FinanceandGlobalSupply ChainFinancePrograms InternationalFinance Corporation(IFC)
Dr.MarcAuboin Counsellor WTO
20yearsof successfulmarriage: IFC,WTOonmultilateral cooperationandtrade financefacilitation
Forovertwodecades,theInternationalFinance Corporation(IFC),theWorldTradeOrganization (WTO),andmultilateraldevelopmentbanks (MDB )h b t i h i
Multilateralsatwork: HowIFCissupportingtradeandsupply chainfinanceinemergingmarkets
Bridgingthegendergap intradefinance
Thepartnershipwasbornout ofnecessityduringthefinancial crisesofthelate1990sand early2000sandhascontinued adaptingtoneweconomic challenges.
Toyodasaid,“Wehavebeen workingtogetherforthepast 20yearsandithasbeen goingreallywell.”
Initially,thefocuswason improvingtheavailabilityof tradefinanceduringperiods ofcrisis,likethe2007-2008 financialcrash,whentheG20 mandatedinternational organisationstodevisea
Auboinsaid,“Therewere severalstagesofthiswork whendifferentinstitutionsparticularlytheWTO,IFCand otherMDBsoperatingtrade financeprogrammes-have showntogethernessand rampeduptheirprograms tosupporttradeandtraders atacriticaltime”
Thepartnershipisnotmerely aboutcrisisresponse,butalso aboutlong-termdevelopment. Byworkingtogether,theIFC, WTO,andotherMDBshave enhancedmanycountries' capacitytosupporttheirtrade byimprovingdiagnosticsto identifygapsintradefinance anddirectingresourcesmore effectively
Toyodasaid,“Weappreciate theMDBworkinggroupswhere wehavecreatedmanydifferent taskforces.TheIFCalsoenjoys workingonthesupplychain financeworkinggrouptask force”
Thisworkincludescreatingan enablinglegalenvironmentand othernecessaryinfrastructure formarketdevelopment. Focusingontheseareas ensuresthatbankingandnonbankingsolutionsareavailable tosupportallbusinesses, includingSMEs,thatareintegral toglobaltradenetworks.
Auboinsaid,“Thecornerstone isourEnhancedCooperation Agreementof2021,whereour leadershaveworkedtogether torecognisethattradefinance islargelyadevelopmentissue centredonincreasingthe countries’abilitytosupport theirowntrade.”
Sucheffortsarecrucialin buildingresilientandselfsustainingtradefinance ecosystemsindeveloping economies
TheroleofMDBworking groupsandsupplychain financeinitiatives
Thesepartnerships,along withtheworkinggroupsand taskforcesthatexistthrough them,strivetoaddressthe broadermarketneedsby identifyingandbridginggaps insupplychainfinance
Theseinstitutionsaremaking significantstridesinreducing globaltradefinancegapsby poolingresources,sharing knowledge,andworking towardscommongoals.Their effortsarecriticalinensuring thattradefinanceremains accessibleandefficient, fosteringinclusiveeconomic growthanddevelopment.
ThepartnershipbetweenIFC, MDBs,andWTO,supportedby thestrategicinitiativesofthe workinggroups,playsacrucial roleintheglobaltrade financeecosystem.
Thesecollaborationsensure thattradefinanceisavailable, efficient,andsupportiveofSMEs worldwide,equippingthetrade financecommunitytohandle futurechallengesandsupport sustainableeconomicgrowth
Toyodasaid,“Wearevery happytodotheworkweare consistentlydoingovertimeso thatwecanalltogetherreduce theglobaltradefinancegaps”
DeepeshPatel EditorialDirector TradeFinanceGlobal(TFG)
BrianCanup AssistantEditor TradeFinanceGlobal(TFG)
Panelperspectives: Navigatingthenew wavesofsupplychain finance
Supplychainfinance(SCF)hasalwaysbeen criticaltoglobaltrade,infact,thereareexamples ofancientversionsofbillsofexchangecarvedinto claytabletsinMesopotamiain3000BC.
Supplychainfinance(SCF) hasalwaysbeencriticalto globaltrade,infact,thereare examplesofancientversions ofbillsofexchangecarvedinto claytabletsinMesopotamia in3000BC.
Buttheindustryhasyetagain increasinglygainedattention overthepastfewyears
TheCOVID-19pandemic, coupledwithrisinggeopolitical tensionsandeconomic volatility,hasreshapedtheSCF landscape,promptingrapid adaptationandinnovation.
AttheInternational FinanceCorporation’s(IFC) GlobalTradePartners MeetinginBarcelona,
TradeFinanceGlobal’s(TFG) DeepeshPatelmoderatedthe paneldiscussion“Nearshoring andFriendshoring:Navigating theNewWavesofSupplyChain Finance”with:
ÁngelBustos,Managing Director,GlobalHead, SupplyChainFinance atSantanderCIB;
ParvaizDalal,GlobalHead, TradePayablesatCitigroup;
SergioRodriguez,Europe Head,Productsand Propositions–Trade FinanceatHSBC;
PriyamvadaSingh, ManagingDirectorand GeneralManager,Global Head,SupplyChain FinanceatSMBC
Digitalisationand automation
TheCOVID-19pandemichas actedasacatalystfordigital changeinmanyindustries, andsupplychainfinanceis noexception
Theurgencytoupdatemanual, paper-heavyprocessesas thepandemicclosedoffices aroundtheworlddrovethe adoptionofdigitaltools andautomatedprocesses, transformingSCFoperations
Digitalsignatures,for instance,havereplaced thecumbersomeprocessof collectingphysicalsignatures inseveraljurisdictions,allowing transactionstobecompleted securelyonline
Dalalsaid,“Wenowhave58 locationsgloballywherewe cantakeaclient'sDocuSign ordigitalsignatureandwith theenforceabilityofopinions backingthat,wecangoto thecourtoflawandcall againstthatdocument”
Machinereadingtools havefurtherstreamlinedSCF operations.InNorthAmerica, theprocessoffilingUniform CommercialCode(UCC) documents,whichpreviously requiredextensivelegalreview andweeksofwaiting,has beenreducedtoafewminutes throughautomationthat cananalyseandprocess documents.
Thepandemicalsohighlighted thenecessityofresilienceand adaptabilityinsupplychains, promptingmanycompanies toreconfiguretheirsourcing strategiesandmoveproduction closertotheirmarketsto mitigatedisruptions
Thisreconfigurationhas beensupportedbydigitalSCF platformsthatofferreal-time serviceslikecurrencyconversion andself-originationforclients. Theseplatforms,designed withmicroservicesarchitecture, providetheflexibilityneededto catertodiverseclientneedsand integratewithexistingsystems.
Bysimplifyingaccesstofinance andreducingbureaucratic hurdles,digitaltoolsarehelping todemocratiseSCF,enabling moreplayers,especiallysmall andmediumenterprises(SMEs) andthoseinemergingmarkets, toparticipateinandbenefit fromglobaltrade
Challengesand opportunitiesin emergingmarkets
Emergingmarketsholdthekey toaddressingthetradefinance gap,whichhaswidened from$1.7trillionto$2.5trillion accordingtothelatestfigures fromtheAsianDevelopment Bank’sresearchin2023
Thesemarkets,characterised byrapideconomicgrowthand dynamicconditions,arecrucial inbridgingthefinancingdivide thataffectsmanySMEsin globalsupplychains,however, thejourneyisnotalwayseasy Oneoftheprimaryhurdles istheregulatoryenvironment. Often,thenecessarylawsand frameworkstofacilitateSCF areeitherunderdeveloped ornon-existent,creating significantbarriers
Additionally,evenwhen thereareexistingregulations, standardisationisnotwhere itneedstobe
Bustossaid,“Itisverydifficult tocreateglobalstandardsfor regulationsandprocedures. Therealitythatwehavein Europehasnothingtodowith therealitythatwehavein LatinAmerica,whichisnot thesameasthereality thatwefindinAsia”
post-shipmentconfirmed invoicediscountingatscale Further,thisclassicpayables financestructureispossible onlyattheveryendofthetrade cycleforsuppliers,whiletheir needsareforfinancingall alongthevaluechain,not justtheconfirmedinvoice discounting Thisiswhere partnershipswithlocalbank andmultilateralscouldbe useful.Theywouldallow supplierstoaccessfinancing earlierinthevaluechain,wh couldreallymakeanimpact whencoupledwithconfirme payablesfinance.”
IncontrasttotraditionalSCF, whichtypicallyonlybenefits thefirst-tiersuppliersthatare directlylinkedtolargeand creditworthybuyers,deep-tier SCFgoesdeeperdownthe chainwheresmallersuppliers oftenstruggletoaccess financing
Singhsaid,“There'salotof workthatstillhastobedonein emergingmarketsaroundlaws protectingtitleandassignment ofareceivable It'scritical toenablebankstooffer
Addressingtheseregulatory gapsrequiresconcerted effortsfromgovernments, internationalorganisations, andpublic-private partnerships,whichhave emergedasapowerfultool toovercomethesechallenges.
Anotherinnovativestrategy beingdeployedisdeep-tier supplychainfinance
Rodriguezsaid,“Weneedto considerthatamaterialportion ofthetradefinancegapisin thedeeperlevelsofthesupply chain,awayfromthose top-tiersuppliers”
InregionslikeChina,regulatory frameworkshaveevolvedto supportdeep-tierSCF,allowing financingtopermeateseveral layersofthesupplychain.This modelfacilitatesfinancingfor eventhesmallestsuppliersby enablingthereceivablesfrom first-tiersupplierstobesplit andtransferreddigitally, reachingthosemostinneed.
Byensuringthateven thesmallestplayersinthe supplychainhaveaccessto necessaryfinancing,emerging marketsareenhancingtheir economicresilienceand contributingtothestability andefficiencyofglobaltrade networks,somethingthatis morepressingamidrising geopoliticaltensions
Geopoliticaland economicimpacton supplychains
Globalsupplychainshave alwaysbeensusceptibleto macroeconomicvolatility, however,escalating geopoliticaltensionshave amplifiedthesechallenges, disruptingtraditionalsupply routesandcompelling companiestorethinktheir resiliencestrategies.
Thepandemicexposedthe fragilityofsupplychainsthat spannedmultiplecontinents andreliedheavilyondistant manufacturinghubs Asshippingrouteswere constrictedandthephysical flowofgoodswashampered, businessesrealisedthatthe
Multilateralsatwork: HowIFCissupportingtradeandsupply chainfinanceinemergingmarkets
existingmodelsofglobalisation, whichoftenprioritisedcost efficiencyoverresilience,were nolongersustainable
Geopoliticaltensionshave furtherunderscoredtheneed forsuchstrategicshifts.For instance,thetradewar betweentheUnitedStatesand Chinapromptedcompaniesto diversifytheirsupplychainsto mitigatetherisksassociated withpoliticalinstability
businessescannavigate geopoliticaluncertainties withgreaterconfidence.
Themovetowardsregional centresofsourcingandsales aimstocreatemorelocalised andresilientsupplynetworks. Forinstance,asignificant portionoffashionexecutives arenowconsideringmoving manufacturingclosertotheir primarysalesmarketsinthe UnitedStatesandEurope
Singhsaid,“Mexicoisnowthe USA'slargesttradepartner, overtakingChina.However, ifyoulookattheamountof investmentinMexicobyChina, ittellsadifferentstory”
Thisshiftisnotmerelyabout relocatingproductionbutalso aboutforgingstrongertrade partnershipswithpolitically stableandeconomically reliablecountries anapproach referredtoasfriendshoring Byestablishingsupplychains withinalliedorfriendlynations,
Thistrendhighlightsabroader reconfiguration,withthefocus shiftingfromcostoptimisation tosupplychainrobustness andreliability.
Bybringingproductioncloser tohomeandaligningwith politicallyandeconomically stablepartners,companiesare betterequippedtowithstand theuncertaintiesofthemodern world,ensuringasteadyand reliableflowofgoodsinan increasinglyunpredictable environment
TradeFinanceGlobal(TFG)istheleadingB2Bfintechintradefinance.
TFG’sdata-ledoriginationplatformconnectscompanieswithinnovative tradeandreceivablesfinancesolutionsfromover300financialinstitutions.
Weassistspecialistcompaniestoscaletheirtradevolumes,bymatching themwithappropriatefinancingstructures–basedongeographies, products,sectorandtradecycles Contactustofindoutmore
Attractingaround160kmonthlyreaders,ourpublicationshaveaglobal audiencein187countries.
Ourspecialistcontenthubsprovidefreeguides,thoughtleadershiparticlesand featuresonInternationalTrade,LettersofCredit,Shipping&Logistics,Risk& Insurance,Treasury&FX,Blockchain&DLT,Legal,ReceivablesandExportFinance
TFGarestrategicmediapartnersfortradeconferenceproviders aroundtheworld.
TFGalsohoststheInternationalTradeProfessionalsProgrammewithLIBF,and fundstheAccelerateScholarship,agranttohelpstudentstopursueacareerin trade.OthersknowusthroughourAnnualInternationalTradeAwards,celebrating outstandingplayersandcontributorsinthetradeecosystem
Throughtheseactivities,TFGisdemocratisingtradefinance.
