Trade Finance: A Catalyst for Growth in Asia
While large businesses have resumed international trade at levels seen before the financial crisis, small- and medium-sized enterprises (SMEs) have not fared as well. For these firms — the backbone of economies everywhere — growth is impeded by the limited availability of bank loans to finance trade. The problem is especially acute for SMEs in Asia, the world’s largest trading region and the one most reliant on trade finance.
This report points out the major impediments to financing in the region and recommends regulatory and procedural changes. It assesses the state of trade finance in Asia, paying particular attention to the ASEAN countries and the needs of SMEs. It emphasizes that to succeed, regional efforts to integrate trade law and procedures must be combined with the replacement of paper documents with electronic transactions, as well as standardized procedures across countries.