Global Trade Finance Market (2022 - 2027): 80-90% of Trade Relies on Finance, Credit and Guarantees - ResearchAndMarkets.com

DUBLIN--(BUSINESS WIRE)--The "Global Trade Finance Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)" report has been added to ResearchAndMarkets.com's offering.

About 80 to 90% of world trade relies on trade finance which includes trade credit and guarantees. Exporters and importers from least-developed countries tend to pay very high fees, which increase their costs of trade while traders from developed countries benefit from low-interest rates and fees provided by international banks.

Lending And Factoring done in the trade finance market is mostly short term in nature. But the coverage of trade finance is not uniform.

Technology adoption in trade finance has brought structural changes to the way trade happens globally today. With the use of open APIs, what were traditionally closed systems are now bringing in other capabilities to extend their offerings.

2019 has seen a mix of instability in the macroeconomic and geopolitical landscape. US-China Trade War and Brexit have taken their toll on the market.

An estimated 420 billion USD loss in exporter revenues. In 2020, the pandemic has created an ever-lasting impact on the way business is conducted across the globe.

Key Market Trends

Technology Adoption - DLT significance in Trade Finance

Technology adoption is key for any market success and the trade finance market is no exception to this. The global trade finance gap currently stands at $1.5 trillion, or 10% of merchandise trade volume, and is set to grow to $2.4 trillion by 2025, the Asian Development Bank calculates.

But this gap could be reduced by $1 trillion if DLT is used more broadly. The process of checking documentation against the defined trade rules can now happen in a matter of minutes using services that combine Optical Character Recognition (OCR), Machine Learning (ML), and Artificial Intelligence (AI). This saves a lot of time.

Major banks and trade tech companies have formed consortiums to develop and adopt DLT into the trade finance structure.

Market Restraint: Non-Uniform Access of Trade Finance Across Regions

A lack of trade finance to developing countries is a clear non-tariff barrier. SMEs play a crucial role in trade financing with 20% of US exports and 40% of EU exports, yet the face greatest challenges in accessing affordable trade financing. Globally over half of trade finance requests by SMEs are rejected while only 7% get rejected for MNCs.

For more information about this report visit https://www.researchandmarkets.com/r/2i26jr.