2015 Trade Finance Gaps, Growth, and Jobs Survey

The geographic concentration of trade finance shortfalls appears to be driven by a combination of banks rationalizing existing business away from high-risk markets and weaker trade in some regions.

This year’s survey follows from and improves on ADB’s previous efforts to understand where and why gaps in global trade finance exist and their impact on growth and jobs. In addition, this year’s questions sought more clarity on the unintended consequences associated with regulatory requirements designed to stop financial crimes, which were again raised as a major impediment to the availability of trade finance.

Key Points

• The global trade finance gap stands at $1.4 trillion, $693 billion of which is in developing Asia (including India and the Peoples Republic of China).
• While availability of trade finance has improved, gaps have become more concentrated
• 45% of banks reported terminating correspondent banking relationships due to the cost or complexity of compliance with regulations designed to stem financial crimes.
• Small and medium sized enterprise proposals for trade finance are rejected 52% of the time, while multinational corporations have 87% of their proposals accepted.
• 46% of firms report that a doubling of trade finance availability would fuel an increase in production and exports.