DRAFT Improving the SMEs Access to Trade Finance
in the OIC Member States
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IV. CONCLUSIONS AND RECOMMENDATIONS
4.1. Conclusions
Trade finance has clearly been recognized as being critical to the successful conduct of
international commerce, and it is widely acknowledged also that the role of SMEs globally, and
specifically within OIC Member States, is critical to the creation of economic value, the creation
of sustainable employment and growth and the recovery and prosperity of nations at all stages
of development.
Relatedly, the challenges faced by SMEs in accessing financing and trade financing, whether in
conventional form or in Shari’ah compliant form, can be identified and are often quite similar,
irrespective of the degree of advancement of an economy, or of the demographic or sector
focus of a country’s SME segment. Risk assessment and perception, technical competency
among SMEs as borrowers, limited capacity among lenders and numerous other challenges
identified in the literature around SME finance seem to be very broadly relevant. Policy issues
related to financial regulation, including capital adequacy, will be relevant to different degrees
in different markets, and will relate directly to the rollout of Basel III, for example, however,
the relevance remains, and the need (and the opportunity) to prepare is relevant across a wide
range of jurisdictions.
The raised profile and priority around trade finance, both in terms of access to this type of
financing and in terms of the need to develop competencies and capacity related to trade
finance comes at an opportune moment in the history of the international economic system
and the global system of trade. This is a moment when the critical importance of trade is
universally acknowledged, and thus a time when efforts to secure support, resources and
appropriate priority around trade finance initiatives will have maximum likelihood of success.
Trade finance is a domain that has historically been the purview of practitioners. Limited
academic rigour or analysis was applied to this area, and data or benchmarking insight has
been very scarce and difficult to source, in part because of the proprietary nature of such
information in the private sector and in part because of the veil of mystery and complexity that
has long surrounded the financing of international commerce.
This situation has changed significantly and for the better as a direct result of the global crisis,
and there is now significantly more data, analysis and thoughtful energy being directed at
trade finance, across commercial, political and academic and IFI circles. AT the same time,
practical and commercially viable and compelling innovations such as supply chain finance and
the Bank Payment Obligation provide concrete opportunities to shift from analysis of the SME
access to trade finance issue, to the planning and execution of concrete steps aimed at
resolving the issue.