DRAFT
Improving the SMEs Access to Trade Finance
in the OIC Member States
57
III.
MAIN COMMON CHALLENGES FOR THE SMEs OF
THE OIC MEMBER STATES IN TRADE FINANCING
3.1. SME Access to Trade Finance: A Near-Global Challenge
SMEs globally, with only a few notable challenges, report and experience challenges in
accessing financing, including trade finance in support of their international commercial
aspirations. Germany may provide a unique example in the effective support of SMEs in a
variety of dimensions, including the success of SMEs in competing internationally and in being
demonstrably key to economic growth and value creation through trade.
The nature of trade finance is such that its mechanisms and practices are highly consistent on a
global basis. Leading providers of trade finance operate across borders, across regions, and
very often, on a global basis, or at minimum, with clear linkage to global networks of providers
such as correspondent banks, international institutions and various government agencies.
Accordingly, much of the preceding sections describing trade finance, its mechanisms and the
relative policy issues and challenges, will apply broadly to OIC Member States, to varying
degrees and with individual nuances. SME access to finance is arguably a universal challenge
across much of the international system, and it is in this universality that there is the basis for
political leverage, competitive advantage and differentiation, as individual States make the
determination that the linkages demonstrated earlier, between SMEs, trade success and
economic value and growth apply to their own circumstances.
Trade finance flows globally; the trade financing gap – the difference between available trade
finance, and the estimated amount of trade finance required – is estimated to be between $1.6
to $2 trillion annually or over 11% of global merchandise trade. SME challenges in accessing
trade finance are the result of global market dynamics and the flow of (limited) capital to
higher-return activity.
As described earlier the issue of insufficient capacity in global trade finance has been
recognized and is at the root of momentum in several areas:
Greater engagement of export credit and other public sector entities in addressing the
“market gap” in trade finance
Increased involvement of international financial institutions in addressing gaps in
access to finance in developing and emerging markets in particular
Initiatives by banks and private sector providers aimed at attracting greater capital
from new sources, to provide additional liquidity and capacity in support of trade
finance
Proactive attempts across a range of economies (US, UK, Germany, UAE and others) to
take policy measures in support of SME competitiveness in international markets,
including specific efforts to facilitate access to financing and trade finance
The nature of trade and supply chain finance, and the opportunities and challenges described
in the earlier sections are very directly relevant and applicable to OIC Member States, by the
nature of trade finance itself. OIC Member-specific issues will be nuanced variations of the