Small And Medium Enterprises (SME's) Oppertunity And Statistics Overview

It’s commonly known that small-medium enterprises (SMEs) struggle to access trade finance. This is driven by a combination of factors including creditworthiness, collateral requirements, short-term liquidity, and political or currency risk. The repercussions however are less known. The global trade finance gap is a major impediment toward reducing poverty and minimizing inequality — two areas that the UN’s Sustainable Development Goals (SDGs) set out to eradicate.

In 2019, the Asian Development Bank already estimated the global trade finance gap at a staggering $1.5 trillion, but amid the fallout from Covid-19 the trade finance gap has skyrocketed.

New research from the International Chamber of Commerce (ICC) estimates an additional $1.9 to $5 trillion of trade finance is necessary simply to return to the 2019 levels. Factoring in this estimation, along with the existing 2019 trade finance gap ($1.5 trillion), means we now need between $3.4 and $6.5 trillion to be able to meet the SDGs. In the ongoing debate as to how this can be achieved, the role that banks can play should not be overlooked.

Source: standard charted