2.2
WHAT IS THE APPETITE FOR SME TRADE FINANCE?
In order to guage the market gaps for trade finance, TFG asked respondents whether a specific SME trade finance lending product would be of interest. 90% of respondents showed interest, as it would facilitate financing to pay suppliers and to hold stocks, as well as be useful for invoice finance purposes. However, when provided with the specific price point of 4%-8% per annum for these services, interest dropped to 80%.
Overall interest in new trade finance services
Overall interest at 4%-8% p.a.
2.2.1 IMPACT OF CURRENT FINANCING COSTS ON PROPENSITY TO PAY The largest overall drop in interest at the stated price point came from those firms that are already paying 2%-4% per annum. In general, 94% of firms that said they pay 2%-4% for their current financing indicated an interest, but that figure dropped to 59% at the 4%-8% price point. This decline in interest among firms that currently pay 2%-4% is notable, as this group contains one third of the total respondents, which is the largest of any price point. Interestingly, the 12% of respondents that currently pay less than 2% for financing did not seem any less interested at 4%-8%. 32
What is the appetite for SME trade finance?
