Improving the SMEs Access to Trade Finance DRAFT
in the OIC Member States
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Enhancing access to trade finance facilities for SMEs is useful, but the impact of such measures
is amplified when delivered together with targeted trade facilitation programs and measures
ranging from market access support to training to various forms of capacity development
among SME beneficiaries of such programs. A holistic and complementary approach presents
not only an opportunity to access financing, but the greater likelihood of having SMEs pursue
international opportunities, and the higher probability of success and economic value-creation.
The advantage of seeing trade and supply chain finance access for SMEs in a broader context is
in the opportunity to maximize the value and impact of financial resources directed at SME
trade financing. As collaboration and partnership between OIC Member States evolves and
extends across participating nations, there is the probability of generating multiples of value
for SMEs and for the economies in which they are based.
There is no specific cost associated with a particular approach that accounts for the broader
context in and of itself, however, in taking such an approach, the scope of eventual programs,
projects and activities is likely to expand, and thus indirectly imply a need for larger budgets.
The extent to which this may be true is difficult to estimate without estimating the impact of
specific initiatives.
Recommendation 3: Link policy initiatives directly to economic value and to the
creation of economic value for OIC Member States individually and as a Group.
Policy initiatives that are opted into by OIC Member States such as the option of creating a
national export credit agency should be linked as directly as possible to the expected creation
of economic value, including employment and increases to GDP or even incremental business
tax revenue as a result of increased trade flow.
The Asian Development Bank Trade Finance Survey of 2013 provides a preliminary
framework for linking the availability of trade finance to job-creation and increased
production; while ADB will admit that this is an initial attempt that requires refinement and
the application of a more robust methodology in future iterations, this is an important
contribution to advancing the understanding of the importance of trade and trade finance.
In addition to taking proactive steps to link the development of SME-focused solutions to the
challenges of access to finance, it is recommended that OIC Member States either collaborate
with the ADB to enhance the robustness of the current framework and data-gathering process,
or, undertake its own analysis across OIC Member States. The ultimate objective is to create a
strong and objective business case to support initiatives that will facilitate SME access to trade
finance.
The advantage of this approach is in the ability of stakeholders to argue objectively and on the
basis of demonstrable benefit and value-creation, in favour of initiatives that facilitate greater
SME access to trade and supply chain finance. Whether the COMCEC decide to pursue
collaboration with the ADB or to devise a process aimed specifically at OIC Member States, the
opportunity to shape a rigorous process and to influence the selection of metrics aimed at
quantifying the value of trade finance is of some importance and priority.
Policy initiatives at the national and sub-national levels should be mandated to take into
account, opportunities to address the challenge of SME access to finance and trade finance,