Improving the SMEs Access to Trade Finance DRAFT
in the OIC Member States
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1.8. Policy Considerations and Framework
Trade finance is provided through a combination of private sector and public sector sources.
Given the nature of trade finance, both in terms of the areas of activity impacted, and the
nature of the key providers of trade finance, there are numerous opportunities, from a policy
perspective, to positively affect the availability and effectiveness of trade finance.
1.8.1. Supra-National Engagement
There are important opportunities for engagement with agencies at the supra-national level,
including the International Chamber of Commerce that is a centre of expertise and activity in
trade finance, along with organizations such as the ITFC and related OIC-focused
organizations, as a means of accessing expertise, aligning policy initiatives and linking to
leading international standards and practices around the provision of trade finance. Similarly,
linkage to IFI’s and international institutions through appropriate levels of representation, to
remain current about and to influence developments in the global trade finance environment
are well-advised, particularly under persistently challenging market conditions.
1.8.2. Public Policy
The nature of trade finance and its impact in terms of economic value creation (or the
opportunity cost resulting from a lack of trade finance) are sufficiently critical to warrant
specific attention at the level of national public policy, particularly in nations where trade is
central to economic activity or to development efforts.
Public policy can involve the conception and promulgation of appropriate mandates for
national export credit agencies, or the creation of such agencies where they do not exist and
ECA support would be warranted. Relatedly, the establishment of various guarantee schemes
to complement financing and liquidity programs are advisable.
Where a government has a formal trade promotion infrastructure at the national or sub-
national levels, such as Trade Promotion Organizations or inward Investment Promotion
Agencies, the potential to integrate trade financing programs and advisory support within such
entities and programs merits careful consideration.
Awareness-raising among entrepreneurs and business executives can be an effective
complement to policy initiatives focused on access to trade finance. Measures aimed at raising
the technical competency of bankers and public sector officials (including central bank
supervisory authorities) around trade finance are important dimensions of the broader public
policy framework.
1.8.3. Capital Adequacy
The regulatory context, in particular around banking entities and export credit programs,
likewise, demands attention in its significant, even definitive impact on trade finance – both in
terms of market capacity to provide trade finance, and in terms of ultimate access to trade
finance for SMEs and for national economies.