The World Trade Organisation (WTO) has released a new study focusing on SMEs’ lack of access to trade finance, providing a list of recommendations to address the gap.
WTO Director-General Roberto Azevêdo has issued a call for action to help close the gaps in the availability of trade finance that affect the trade prospects of small and medium-sized enterprises (SMEs), particularly in Africa and Asia. In a new WTO publication, “Trade Finance and SMEs: bridging the gaps in provision”, which examines the problem and looks into possible solutions, DG Azevêdo says that easing the supply of credit could have a big impact in helping small businesses grow and in supporting the development of the poorest countries.
The WTO’s strategy focuses on three fronts: firstly, encouraging global financial institutions to stay engaged, ensuring that regulations are not prohibitive; then, enhancing local financial institutions’ capacity to supply trade finance to SMEs; finally, supporting multilateral development banks’ programmes increasing the availability of trade finance.
A six-point recommendation list tackles additional issues, from enhancing existing multilateral banks’ trade finance facilitation programmes, to closing the trade finance knowledge gap, strengthening training programmes, as well as maintaining a closer dialogue with regulators and improving monitoring of trade finance provisions. The report also suggests that setting specific targets could help in mobilising and co-ordinating efforts to improve SMEs’ access to trade finance. Source: smefinanceforum.org