DRAFT Improving the SMEs Access to Trade Finance
in the OIC Member States
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This challenge is nearly universal, and is problematic in that non-trade bankers often exercise
decisive influence on the decisions that enable a bank to support customers – including SME’s
– in the pursuit of international trade opportunities. Specifically, credit and risk decisions
which impact a bank’s ability to pursue trade finance business are often the purview of
domestic bankers with limited international experience, and often, little or no direct
knowledge of the markets on which their decisions have so much impact.
1.6.2. Non-Bank Providers: Boutique Firms
Importers and exporters can avail themselves of the services of non-banks in seeking to obtain
support in trade and supply chain finance.
Several boutique or specialist finance firms focus on providing solutions to companies engaged
in international commerce, some particularly focusing on supporting the aspirations of small
and medium-sized enterprises.
The SME focus of certain boutique firms may make them particularly attractive as alternative
providers of trade and supply chain finance, as much due to their domain focus, as to their
willingness to support small businesses with transactional advice, and their preparedness to
assess risk and viability on a bespoke basis, as opposed to on the basis of rigid credit models
that do not typically allow for the unique positive factors shaping the opportunity pursued by
an SME.
Such specialist entities may vary significantly in size, and may face a significantly different
compliance and regulatory regime than banks; such a difference in certain markets might
allow boutique firms to provide financing and liquidity solutions to SMEs on a more cost-
effective basis. Falcon Trade Finance, based in Dubai and with offices across the Middle East
and in Europe, is one such specialist firm with close connections to markets of interest to the
COMCEC, and Kuwait Finance House, likewise, exhibits focus and domain expertise in the
business of trade finance, including Islamic trade finance.
1.6.3. Non-Bank Providers: IFIs and ECAs
a. IFIs
International financial institutions (IFIs) and various multilateral development banks (MDBs)
are donor-supported institutions with mandates focused primarily on international
development. Given the well-established linkages between international development and
trade, and the more recent realization of the importance of trade finance to the pursuit of trade
opportunities, every major IFI now has some form of trade finance program within their
portfolio of activities, lined directly to broader efforts to support development.
IFI trade finance programs include several dimensions:
 Lending and financing products and solutions
 Risk mitigation, guarantee and insurance solutions
 Local bank engagement programs
 Training, technical assistance and competency enhancement programs